Astera Labs, Inc. (NASDAQ:ALAB) shares are trading lower on Tuesday.
Northland Capital Markets analyst Gus Richard maintained the Outperform rating on the stock with a price forecast of $120.
The company reported fourth-quarter results today, with revenue up 179% year-over-year and up 25% quarter-over-quarter.
Astera Labs sees first-quarter revenue in the range of $151 million to $155 million.
The analyst forecasts strong growth for Astera Labs’ revenue, forecasting a 65% increase in calendar year 2025, driven by new products, AI platform diversification, and increasing content in customer racks using merchant GPUs and CSP-built racks with internal ASICs.
The analyst notes that Astera Labs is shipping preproduction volumes of Leo CXL controllers and Scorpio switches, with inventory increasing 77% sequentially to $43 million to meet growing customer demand.
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Per Richard, the market for high-speed connections will grow faster than AI accelerator shipments, with Astera Labs scaling new AI platforms using its own accelerators alongside third-party GPU-based platforms.
The analyst points out that the company’s growth is driven by three key factors: the increased dollar content in next-generation AI accelerator racks with Astera Labs’ products, the ramp-up of custom AI racks using merchant GPUs, and the growth of general computing in data centers through the CLX controller and PCIe 6 products.
Additionally, the company’s serviceable addressable market is estimated to reach $12 billion by 2028.
Price Action: ALAB shares are trading lower by 9.23% to $93.76 at last check Tuesday.
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