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Investing.com - Stifel raised its price target on Astera Labs (NASDAQ:ALAB) to $145.00 from $110.00 on Monday, while maintaining a Buy rating on the connectivity solutions provider. The stock has demonstrated remarkable performance, delivering a 209% return over the past year and currently trading near its 52-week high of $147.39.
The investment firm expects Astera’s second-quarter revenues to exceed its estimate of $172.5 million, representing an 8.2% quarter-over-quarter increase, with potential additional upside from both Aries retimers and Taurus smart cable modules. This growth trajectory aligns with the company’s impressive 200% year-over-year revenue growth and robust gross margins of 76%.
Stifel also anticipates Astera’s third-quarter outlook will surpass its current estimate of $180.0 million, which would represent a 4.3% quarter-over-quarter growth to another record, highlighting the company’s execution across multiple growth drivers.
Recent earnings reports from major hyperscalers support Stifel’s bullish view, as Microsoft (NASDAQ:MSFT), Google (NASDAQ:GOOGL), Meta (NASDAQ:META), and Amazon (NASDAQ:AMZN) all reported continued cloud and AI demand while affirming robust capital expenditure growth plans, including Microsoft guiding to $30 billion in capital expenditure for Q2, a 24% quarter-over-quarter increase.
Stifel reiterated its Buy rating on Astera Labs, describing it as a "key beneficiary of AI-driven data center deployments," with the new price target based on higher comparables and greater confidence in calendar year 2026 estimates, using a 28.7x EV/CY26E sales multiple. According to InvestingPro, the company maintains strong financial health with a current ratio of 13.92x, though it trades at a premium P/E ratio of 537x. Unlock 15+ additional exclusive insights and detailed analysis with InvestingPro’s comprehensive research report.
In other recent news, Astera Labs has seen a series of analyst actions reflecting varied perspectives on its future performance. Morgan Stanley (NYSE:MS) raised its price target for Astera Labs to $125 from $99, maintaining an Overweight rating, based on a projected revenue of $939 million by 2026. Meanwhile, Northland downgraded the stock to Market Perform due to valuation concerns, despite a projected 50% compound annual growth rate through 2028. Stifel also raised its price target to $110, maintaining a Buy rating, as they anticipate strong growth driven by the expansion of Aries retimers and new product revenues. Craig-Hallum increased its price target to $120, emphasizing the positive market impact of Astera Labs’ Scorpio switch family and the completion of its UALink™ standards efforts. William Blair initiated coverage with an Outperform rating, highlighting Astera Labs’ leadership in connectivity silicon for AI applications. These developments provide investors with a range of insights into Astera Labs’ market position and growth potential.
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