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Stock impact report

RBC Initiates Astera Labs (ALAB) at Outperform, Sees Retimer Growth and Scorpio Ramp Driving Upside [Yahoo! Finance]

Astera Labs, Inc. (ALAB) 
Company Research Source: Yahoo! Finance
On January 14, RBC Capital analyst Srini Pajjuri initiated coverage of the stock with an Outperform rating and a price target of $225. The analyst sees robust retimer growth and Scorpio-P switch ramp for ALAB, which they believe should support near-term strength. Astera Labs has underperformed in recent months amid concerns over next-generation scale-up networking standards and the potential for Google TPU progress affecting Astera's key customers, Nvidia and Amazon. Nevertheless, near term fundamentals remain strong on the back of core retimer growth and Scorpio-P switch ramps. The Scorpio-X scale-up switch remains on track for a 2026 ramp, which is a major multi-year opportunity even with lower Amazon Trainium volumes. “Longer term, we see room for multiple scale-up standards and won't rule out ALAB participating in Ethernet/ESU. We believe premium valuation is justified given 40% growth, $10–15B SAM, and 70%+ gross margins. Initiate at Outperform." Astera Labs, Inc. (NASDAQ Show less Read more
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