Astera Labs (ALAB Quick QuoteALAB - Free Report) shares have jumped 112.6% in the past month, significantly outperforming the broader Zacks Computer and Technology sector’s appreciation of 5.1%. Shares of this semiconductor company have outperformed close peers, including Credo Technology (CRDO Quick QuoteCRDO - Free Report) , Broadcom (AVGO Quick QuoteAVGO - Free Report) and Marvell Technology (MRVL Quick QuoteMRVL - Free Report) over the same timeframe. Shares of Credo, Broadcom, and Marvell have returned 27.1%, 13.6% and 7.4%, respectively.

ALAB’s outperformance can be attributed to strong second-quarter 2025 results, which were reported on Aug 5. Since then, ALAB shares have jumped 41.7%, outperforming the broader sector’s return of 2.1%. Shares of Credo, Broadcom, and Marvell have returned 13.7%, 6.8% and 1.5%, respectively, over the same time frame.

Astera Labs’ second-quarter 2025 results benefited from strong demand for the signal conditioning portfolio, driven by PCIe scale-up and Ethernet scale-out connectivity applications in custom ASIC platforms. Net revenues surged 149.7% year over year to $192 million, surpassing the Zacks Consensus Estimate by 11.1%. Scorpio exceeded 10% of total revenues, making it the fastest ramping product line in the history of Astera Labs.

ALAB Stock’s One-Month Performance

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Astera Labs expects third-quarter 2025 revenues between $203 million and $210 million, suggesting an increase between 6% and 9% sequentially. The company is benefiting from strong demand for Aries, Taurus and Scorpio product families, all expected to drive growth in the third quarter of 2025.

Strong Portfolio to Boost ALAB’s Prospects

Astera Labs has emerged as a key player in next-generation data center connectivity, with a full-stack portfolio spanning PCIe 6.0 and Ultra Accelerator (UA) Link for scale up, Ethernet for scale out and CXL for memory. The company is uniquely positioned to gain from the AI Infrastructure 2.0 transition thanks to an innovative portfolio. ALAB expects Scale-up connectivity for rack-scale AI infrastructure alone to add close to $5 billion of market opportunity by 2030. 

In the second quarter of 2025, ALAB achieved a significant milestone with the volume production of its PCIe 6 product portfolio for customized rack-scale AI systems. Scorpio Fabric switches won multiple design wins in the reported quarter. ALAB continues to see strong demand for Scorpio P-Series and X-Series PCIe Fabric Switches. The company expects Scorpio X-Series to begin shipping for customized scale-up architectures in late 2025, with a shift to high-volume production over the course of 2026.

Astera Labs is benefiting from strong demand for Aries and Taurus product families. Diversification across both GPU and custom ASIC-based systems for a variety of applications, including scale-up and scale-out connectivity, is a key catalyst for ALAB’s Aries product family. Aries 6 solution that supports PCIe 6 began volume ramp within rack-scale merchant GPU-based systems during the second quarter of 2025.

Continued deployment of AI and general-purpose systems at leading hyperscaler customers is benefiting the Taurus system. Meanwhile, Leo remains in pre-production shipments as customers scale their development rack clusters to qualify new systems, taking advantage of recently introduced CXL-enabled data center CPU platforms.

UA Link offers a significant growth opportunity for Astera Labs. UA Link combines the memory semantics of PCIe and the fast speed of Ethernet, but is devoid of the software complexity and performance limitations of Ethernet. ALAB expects proliferation of UA Link in 2027 and beyond to represent a significant key catalyst over the long term.

Expanding Partner Base Bodes Well for ALAB

Astera Labs is benefiting from a rich partner base that includes NVIDIA, AMD and Alchip. 

ALAB is advancing next-gen data center infrastructure with the introduction of a PCIe 6-ready reference design based on NVIDIA Blackwell-based MGX platform that leverages Scorpio Smart Fabric Switches for AI and cloud infrastructure. Scorpio-based solutions enable users to maximize GPU productivity through enhanced data center observability, telemetry, and diagnostics using ALAB’s COSMOS rack-scale management software. 

In the second quarter of 2025, Astera Labs expanded its collaboration with NVIDIA to support NVLink Fusion. ALAB is providing additional optionality for customers to deploy NVIDIA AI accelerators while leveraging high-performance scale-up networks based on NVLink technology.

ALAB announced a partnership with Alchip Technologies to advance the silicon ecosystem for AI rack-scale infrastructure by combining its comprehensive connectivity portfolio with the latter’s custom ASIC development capabilities.

ALAB Offers Positive Q3 View; Earnings Estimates Trend Up

Non-GAAP earnings are expected between 38 cents and 39 cents per share for the third quarter. 

The Zacks Consensus Estimate for earnings is pegged at 35 cents per share, up by a penny over the past 30 days, indicating 52.2% growth from the figure reported in the year-ago quarter.
 

The consensus mark for third-quarter 2025 revenues is pegged at $206.7 million, indicating 82.8% year-over-year growth.

ALAB Shares Trading at a Premium

Astera Labs’ stock is trading at a premium, as suggested by the Value Score of F.

In terms of the forward 12-month Price/Sales, ALAB is trading at 35.56X, higher than the sector’s 6.73X, Broadcom’s 20.28X, Credo’s 24.97X and Marvell’s 7.44X.

Price/Sales Ratio (F12M)

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Conclusion

Astera Labs’ innovative portfolio, along with a rich partner base, is expected to drive prospects despite a premium valuation. ALAB currently sports a Zacks Rank #1 (Strong Buy) and has a Growth Score of A, a favorable combination that offers a strong investment opportunity, per the Zacks Proprietary methodology. You can see the complete list of today’s Zacks #1 Rank stocks here.