Among semiconductor stocks, the winners this earnings season have been those with heavy exposure to the artificial intelligence megatrend. Astera Labs showed that with its beat-and-raise third-quarter report.
Late Monday, the Santa Clara, Calif.-based company said its sales surged 47% from the June quarter and 206% from the September quarter last year.
Chief Executive Jitendra Mohan said the company's business of providing connectivity chips for artificial intelligence data centers "has now entered a new growth phase."
Astera Labs stock rocketed 37.7% to close at 95.91 on the stock market today. In intraday trades, ALAB stock notched a record high of 97.35.
Astera Labs began trading on March 20 with its initial public offering priced at $36 a share.
At least 10 Wall Street analysts raised their price targets on Astera Labs after the company's Q3 report.
"ALAB looks to be firing on all cylinders heading into 2025," Jefferies analyst Blayne Curtis said in a client note. He reiterated his buy rating on Astera Labs stock and upped his price target to 100 from 65.
"Lots to love about this report with strength across a combination of products with demand from both Nvidia and multiple AI ASIC (application-specific integrated circuit) platforms (likely Amazon & Alphabet's Google)," Curtis said.
Astera Labs Diversifying Portfolio
JPMorgan analyst Harlan Sur kept his overweight rating on Astera Labs stock and hiked his price target to 110 from 70.
"Astera is the leader in high-speed connectivity for accelerated compute/AI servers," with its PCIe (Peripheral Component Interconnect Express) retimer solutions, he said. The company is leveraging that stronghold into other market segments including traditional networking and memory, Sur said.
Other semiconductor stocks that have been getting an AI lift lately include AI chip leader Nvidia, chip foundry Taiwan Semiconductor Manufacturing and custom AI chipmakers Broadcom and Marvell Technology.
Meanwhile, chipmakers exposed to such lagging markets as PCs, smartphones, automotive and industrial have seen their shares hammered this earnings season. The latest examples are Cirrus Logic, Lattice Semiconductor, NXP Semiconductors and Silicon Laboratories, all of which posted disappointing quarterly reports Monday.
Last week brought downbeat quarterly reports from Onsemi, Qorvo and STMicroelectronics, which reported declining sales and earnings.
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