Astera Labs: Most Attractive AI Crash Of The Season

2026-02-24 08:37:50 ET

Astera Labs ( ALAB ) stock plunged a little over 30% on its 4Q25 print about two Tuesdays ago, hitting a low of approximately $117 and currently hovering at about $129 per share. Logic would say the results were disastrous. While the results flagged margin risks, the post-earnings crash was blown out of proportion, in our opinion. For the quarter, ALAB pulled in record revenue of $270.6 million, up 17% Q/Q and 92% Y/Y, more than comfortably beating estimates of $250 million, and reported adjusted EPS of $0.58, higher than estimates of $0.51, while generating $45 million in net income, an 82% jump from a year ago quarter. Outlook wasn’t the problem either, with management guiding for Q1 revenue in the range of $286 million to $297 million, above Street expectations for $259 million and adjusted EPS of $0.53 to $0.54, higher than estimates for $0.52. ALAB is at the center of the cloud and AI infrastructure ah-ha moment, and, as market reaction proves, that is a double-edged sword. It means hypergrowth and, simultaneously, uber investor scrutiny, thanks to the AI label....

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