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Chicago, IL – July 11, 2025 – Today, Zacks Investment Ideas feature highlights Astera Labs (ALAB - Free Report) .
Leading AI Stock Clears Hurdle Ahead of Earnings: Time to Buy?
The artificial intelligence boom may be just getting started.
Tech stocks have led the charge off the April lows as this bull market enters its next phase. Semiconductor stocks and related companies remain at the heart of the movement.
Astera Labs has been a major beneficiary. The company designs and manufactures semiconductor-based connectivity solutions for cloud and AI infrastructure. Astera offers an intelligent connectivity platform and high-speed connectivity integrated circuits as well as modules, boards, and other related products used in data centers.
Partnerships remain a key catalyst for Astera. The company is deepening its collaboration with chip leader Nvidia as it integrates NVLink Fusion into its connectivity platform, delivering low-latency, memory-coherent links for GPU clustering. These are essential for powering the next generation of large language models and agentic AI models.
ALAB stock is displaying relative strength off the April lows and has been making a series of higher highs. The broader technology sector is providing a durable backing for this industry leader. Increasing volume has attracted investor attention as buying pressure accumulates in this top stock.
The Zacks Rundown
Astera is part of the Zacks Internet – Software industry group, which currently ranks in the top 25% out of approximately 250 industries. Because this group is ranked in the top half of all Zacks Ranked Industries, we expect it to outperform the market over the next 3 to 6 months, just as it has over the past few months.
Stocks in this industry are projected to experience above-average earnings growth, which signifies a powerful tailwind that should lead to higher prices in the future.
Historical research studies suggest that approximately half of a stock’s price appreciation is due to its industry grouping. In fact, the top 50% of Zacks Ranked Industries outperforms the bottom 50% by a factor of more than 2 to 1.
It’s no secret that investing in stocks that are part of leading industry groups can give us a leg up relative to the market. By focusing on leading stocks within the top industries, we can dramatically improve our stock-picking success.
Earnings Trends and Future Estimates
Astera has exceeded the earnings mark in each quarter since last year’s IPO. Back in May, the AI infrastructure provider delivered first-quarter earnings of 33 cents per share, which marked a 17.9% beat relative to consensus estimates.
The company has delivered a trailing four-quarter average earnings surprise of 28.4%. Consistently beating earnings estimates is a recipe for success.
Analysts covering ALAB are mainly in agreement in terms of revisions and have been increasing their earnings estimates lately. Full-year earnings estimates have risen 0.75% over the past 60 days to $1.35 per share. This translates to bottom-line growth of over 60% relative to last year on 77% higher revenues.
As we near Q2 earnings results in early August, the stock appears to be gaining momentum. Analysts are expecting Astera to post a 154% year-over-year increase in adjusted earnings to 33 cents per share. Revenues are anticipated to climb 125% to nearly $173 million.
ALAB Shares Go Full Steam Ahead of Earnings
This market leader has seen its stock advance nearly 90% off the April lows. Only stocks that are in extremely powerful uptrends are able to experience this type of outperformance. This is the kind of stock we want to include in our portfolio – one that is trending well and receiving positive earnings estimate revisions.
The stock has been making a series of higher highs over the past few months. With both strong fundamental and technical indicators, ALAB stock is poised to continue its outperformance.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. As we know, Astera Labs has recently witnessed positive revisions. As long as this trend remains intact (and Astera continues to deliver earnings beats), the stock will likely continue its bullish run.
Bottom Line
Backed by a leading industry group and history of earnings beats, it’s not difficult to see why ALAB stock is a compelling investment. Robust fundamentals combined with an appealing technical trend certainly justify taking a closer look.
Recent positive earnings estimate revisions should also serve to create a ‘floor’ in terms of any sudden or unexpected downside moves. If you haven’t already done so, be sure to put ALAB on your watchlist.
Disclosure: ALAB is a current holding in the Zacks Headline Trader portfolio.
Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Zacks Investment Ideas feature highlights: Astera Labs
For Immediate Release
Chicago, IL – July 11, 2025 – Today, Zacks Investment Ideas feature highlights Astera Labs (ALAB - Free Report) .
Leading AI Stock Clears Hurdle Ahead of Earnings: Time to Buy?
The artificial intelligence boom may be just getting started.
Tech stocks have led the charge off the April lows as this bull market enters its next phase. Semiconductor stocks and related companies remain at the heart of the movement.
Astera Labs has been a major beneficiary. The company designs and manufactures semiconductor-based connectivity solutions for cloud and AI infrastructure. Astera offers an intelligent connectivity platform and high-speed connectivity integrated circuits as well as modules, boards, and other related products used in data centers.
Partnerships remain a key catalyst for Astera. The company is deepening its collaboration with chip leader Nvidia as it integrates NVLink Fusion into its connectivity platform, delivering low-latency, memory-coherent links for GPU clustering. These are essential for powering the next generation of large language models and agentic AI models.
ALAB stock is displaying relative strength off the April lows and has been making a series of higher highs. The broader technology sector is providing a durable backing for this industry leader. Increasing volume has attracted investor attention as buying pressure accumulates in this top stock.
The Zacks Rundown
Astera is part of the Zacks Internet – Software industry group, which currently ranks in the top 25% out of approximately 250 industries. Because this group is ranked in the top half of all Zacks Ranked Industries, we expect it to outperform the market over the next 3 to 6 months, just as it has over the past few months.
Stocks in this industry are projected to experience above-average earnings growth, which signifies a powerful tailwind that should lead to higher prices in the future.
Historical research studies suggest that approximately half of a stock’s price appreciation is due to its industry grouping. In fact, the top 50% of Zacks Ranked Industries outperforms the bottom 50% by a factor of more than 2 to 1.
It’s no secret that investing in stocks that are part of leading industry groups can give us a leg up relative to the market. By focusing on leading stocks within the top industries, we can dramatically improve our stock-picking success.
Earnings Trends and Future Estimates
Astera has exceeded the earnings mark in each quarter since last year’s IPO. Back in May, the AI infrastructure provider delivered first-quarter earnings of 33 cents per share, which marked a 17.9% beat relative to consensus estimates.
The company has delivered a trailing four-quarter average earnings surprise of 28.4%. Consistently beating earnings estimates is a recipe for success.
Analysts covering ALAB are mainly in agreement in terms of revisions and have been increasing their earnings estimates lately. Full-year earnings estimates have risen 0.75% over the past 60 days to $1.35 per share. This translates to bottom-line growth of over 60% relative to last year on 77% higher revenues.
As we near Q2 earnings results in early August, the stock appears to be gaining momentum. Analysts are expecting Astera to post a 154% year-over-year increase in adjusted earnings to 33 cents per share. Revenues are anticipated to climb 125% to nearly $173 million.
ALAB Shares Go Full Steam Ahead of Earnings
This market leader has seen its stock advance nearly 90% off the April lows. Only stocks that are in extremely powerful uptrends are able to experience this type of outperformance. This is the kind of stock we want to include in our portfolio – one that is trending well and receiving positive earnings estimate revisions.
The stock has been making a series of higher highs over the past few months. With both strong fundamental and technical indicators, ALAB stock is poised to continue its outperformance.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. As we know, Astera Labs has recently witnessed positive revisions. As long as this trend remains intact (and Astera continues to deliver earnings beats), the stock will likely continue its bullish run.
Bottom Line
Backed by a leading industry group and history of earnings beats, it’s not difficult to see why ALAB stock is a compelling investment. Robust fundamentals combined with an appealing technical trend certainly justify taking a closer look.
Recent positive earnings estimate revisions should also serve to create a ‘floor’ in terms of any sudden or unexpected downside moves. If you haven’t already done so, be sure to put ALAB on your watchlist.
Disclosure: ALAB is a current holding in the Zacks Headline Trader portfolio.
Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners Up
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.