Astera Labs Stock Slides 4%, Wiping Out $1.5 Billion, After Record Sales And Higher Guidance
The chip designer reported third-quarter sales up 154% and guided higher, yet Needham and Susquehanna cut their price targets.
Astera Labs, which designs connectivity chips and software for cloud and AI data centers, fell 3.73% to $224.90 in Wednesday trading as of 10:12 a.m. ET, erasing about $1.5 billion in market value. The drop came a day after record third-quarter results and a fourth-quarter sales forecast well above the latest quarter.
Record quarter, 154% growth
The company reported on Tuesday that third-quarter revenue reached $584.9 million, up 154% from a year earlier. Its Scorpio fabric switches grew into its biggest product line. Quarterly gross margin came in at 72.3%.
Looking ahead, Astera expects fourth-quarter sales between $730 million and $750 million, with adjusted per-share profit of $1.62 to $1.66.
The company sells retimers, Ethernet modules, memory controllers and switches, managed with its COSMOS software suite, to hyperscalers (very large cloud operators), AI accelerator vendors and system makers. In 2025, its top three end customers made up about 86% of revenue, according to its annual report.
Analysts trim their targets
Needham cut its price target to $300 from $425 and kept a Buy rating, according to a Benzinga report. Susquehanna lowered its target to $258 from $310 with a Neutral rating.
The stock was on pace for its second drop of 3% or more this month.
A retreat already under way
Astera shares were up about 40% for the year at Tuesday's close, ahead of the S&P 500's gain of about 11%. But the stock had already fallen 33% over the prior month and sat 52% below its highest close of the past year, set on June 30.
Market value stood at about $39.0 billion at Wednesday's report time.
Wednesday's slide extends a pullback that began well before the earnings report.
Sources
- Astera Labs' outlook beats but analysts' concerns on valuation rem (ALAB:NASDAQ) — seekingalpha.com
- Astera Labs slides even as Q3 results, guidance top estimates (ALAB:NASDAQ) | Seeking Alpha — seekingalpha.com
- Astera Labs Tops Q3 Estimates, Issues Strong Guidance, Shares Slide — benzinga.com
- Astera Labs Analysts Cut Their Forecasts After Q3 Results — benzinga.com
- Astera Labs Stock Rises After Revenue Jumps 154% — Yahoo Finance
- The company's filing (Astera Labs) — SEC filing
- Astera Labs, Inc. (ALAB) Q3 Earnings and Revenues Beat Estimates — Zacks Investment Research
- Astera Labs — Form 10-Q for the quarter ended 2026-09-30 (quarterly results) — SEC EDGAR
