Emphasizing the semiconductor company’s close links to Nvidia (NVDA, Financials) and hyperscale like Amazon Web Services, Astera Labs (ALAB, Financials) shares climbed 3.9% in Monday’s early trade after Citi (C, Financials) starting coverage with a “Buy” rating and a $120 price target.
Astera Labs (ALAB, Financials) stock is up 3.9% in Monday’s early morning trading after Citi (C, Financials) began coverage of the semiconductor company with a Buy rating and a $120 price target.
Atif Malik, a Citi analyst, highlighted the retimers seen in more than 80% of artificial intelligence systems. The company’s proprietary software solves transmission problems and provides special exposure to Nvidia and hyperscalers like Amazon Web Services, Malik added.
From its March public offering, the stock has increased 43%. But thanks to forecasts for increased sales in 2025 and 2026, Citi’s price target indicates it might climb by more than 35%. Assuming a 1.3x-1.5x retimer-to-GPU ratio, the bank’s forecast exceeds consensus sales predictions for those years by 12% and 10%, respectively, Malik added.
Through its Leo products, Astera Labs also offers memory pooling and expansion via Compute Express Link. Based on Citi, the newly introduced Scorpio division of the corporation might increase its whole addressable market to $12 billion.
Malik also underlined the company’s Cosmos program as a unique tool on the market. He also mentioned how appealing Astera Labs is for possible mergers and acquisitions because of its close relationships to Nvidia and Amazon (AMZN, Financials).
This article first appeared on GuruFocus.
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