Nvidia, AMD Supplier Astera Labs' Stock Jumps On Price-Target Hikes Post Q3 Beat: Retail Eyes More Gains

Shares of Astera Labs ($ALAB) soared 30% on Tuesday after a stellar third-quarter (Q3) earnings report and raised guidance sparked multiple price-target hikes. 

The semiconductor firm, a supplier of chip-based connectivity solutions for Nvidia, AMD, and Intel, surpassed expectations with adjusted Q3 earnings of $0.23 per share (vs. $0.17 consensus) and revenue of $113.1 million (vs. $97.4 million forecast). 

For the fourth quarter, Astera Labs projected adjusted earnings of $0.25 to $0.26 per share, significantly above consensus estimates of $0.18, alongside revenue between $126 million and $130 million.

CEO Jitendra Mohan credited the Q3 revenue jump — up 47% sequentially — to growth across product lines supporting AI platforms using both third-party GPUs and internally developed AI accelerators. 

He highlighted Astera’s expanding portfolio, which includes the newly launched Scorpio Fabric Switches, as essential to the company’s multi-year growth, especially with hyperscaler customers.

Following the earnings news, at least seven Wall Street analysts rushed to raise their price targets on Tuesday. 

Morgan Stanley lifted its target to $94 from $74, citing robust revenue and a promising outlook fueled by GPU platforms and ramping ASIC processors. 

Craig-Hallum set a $105 target, confident Astera has addressed customer concentration concerns and is poised for substantial gains. 

Meanwhile, Jefferies on Monday had reportedly assigned a ‘Buy’ rating and a $69.65 price target, lauding the firm’s broad demand from both Nvidia and multiple AI ASIC platforms and saying ALAB "looks to be firing on all cylinders heading into 2025."

Retail sentiment on Stocktwits surged to ‘extremely bullish’ (95/100) on Tuesday morning amid a sharp rise in message volume, with some retail investors forecasting the stock will break $95, while others anticipated a rapid rise past $120.

Astera Labs, which went public earlier this year, is now up roughly 30% since its debut in March.

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