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Investing.com - Stifel has raised its price target on Astera Labs (NASDAQ:ALAB) to $110.00 from $100.00 while maintaining a Buy rating on the semiconductor connectivity company. The company, currently valued at $16.15 billion, has shown impressive growth with revenue surging 200% over the last twelve months, though InvestingPro analysis indicates the stock is trading above its Fair Value.
The research firm expects Astera Labs could report June quarter results slightly above its $172.5 million revenue estimate, representing 8.2% quarter-over-quarter growth. This growth is attributed to continued expansion of Aries retimers across multiple customers and programs, including pre-production revenues for its new Smart Gearbox. With the earnings report due in 18 days, InvestingPro data shows 10 analysts have revised their earnings estimates upward for the upcoming period.
Stifel also cited further quarterly growth from 400GbE Taurus revenue and continued pre-production revenue for both Scorpio P-Series and X-Series products, which are on track to contribute more than 10% to total calendar year 2025 revenue.
The company’s non-GAAP gross margin is guided to approximately 74.0%, down 87 basis points quarter-over-quarter and in line with Stifel’s prior estimate, based on a similar anticipated hardware mix as in the first quarter of 2025.
Management has reiterated its long-term gross margin target of 70% (non-GAAP) over time as hardware revenue continues to experience significant growth, with Stifel expressing it remains impressed with Astera Labs’ industry-leading profitability.
In other recent news, Astera Labs has experienced several significant developments. Craig-Hallum has raised its price target for the company to $120, citing the impact of the Scorpio switch family on market growth and the completion of UALink™ standards, which opens new market opportunities. William Blair initiated coverage with an Outperform rating, highlighting Astera Labs’ leading role in connectivity for AI servers and its potential for sustained revenue and earnings growth. Evercore ISI also increased its price target to $104, reflecting confidence in the company’s growth trajectory and its alignment with AI infrastructure needs.
Moreover, Astera Labs has announced a collaboration with NVIDIA (NASDAQ:NVDA) to enhance NVLink solutions, aimed at improving AI network performance for hyperscalers. This partnership builds on previous joint efforts and is expected to solidify Astera Labs’ market position. Additionally, Morgan Stanley (NYSE:MS) upgraded the stock to Overweight, setting a price target of $99, based on attractive valuation and growth potential in the AI sector. These recent developments suggest that Astera Labs is strategically expanding its market presence and product offerings in the rapidly evolving AI technology landscape.
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