Product line in full bloom! Astera Labs (ALAB.US) delivers perfect Q3 report, earning praise from Wall Street.

After announcing better-than-expected third-quarter performance, Astera Labs (ALAB.US), known as "Mini NVIDIA Corporation," once again received positive evaluations from Wall Street. The financial report shows that Astera Labs, which focuses on providing semiconductor connectivity solutions for cloud and AI infrastructure, achieved revenue of $230.6 million in the third quarter, reaching a historical high. This represents a 20% increase quarter-on-quarter and a significant 104% increase year-on-year. Non-GAAP diluted earnings per share were $0.49, compared to a loss of $0.05 per share in the same period last year, achieving a turnaround from loss to profit. Looking ahead to the fourth quarter, the company expects revenue to reach $245 million to $253 million, with non-GAAP diluted earnings of about $0.51 per share. Needham maintained a "buy" rating on the stock in a report, raising its target price from $205 to $220. The team of analysts led by Quinn Bolton stated: "Astera Labs once again achieved significant performance exceeding expectations and raised guidance, thanks to the overall growth of the Scorpio, Aries, and Taurus product lines. Our main points include: 1) the company has secured new Scorpio P design orders from multiple hyperscale cloud providers and has received support for commercial and custom accelerators. Shipments for the Scorpio X series products are expected to begin in the fourth quarter of 2025, with volume production in 2026; 2) PCIe Gen 6 products accounted for more than 20% of third-quarter revenue, driving an increase in average selling price. For the PCIe version of the Scorpio X series, the company is currently collaborating with over 10 AI platform providers." It is understood that the Scorpio X series is Astera Labs' intelligent fiber switch product. The analysts added that the Astera Labs UALink project collaboration remains active, and company management believes this will bring incremental revenue to its PCIe customer base. Citi also maintained a "buy" rating on Astera Labs with a target price of $275, emphasizing that the company delivered an outstanding performance exceeding expectations and raising guidance. The team of analysts led by Atif Malik stated: "Overall, management expects the Scorpio X series to become the largest revenue contributor by 2026, with single accelerator value enhancements in the DRIVE, the UALink contributing revenue starting in 2027, and scaling up optical products in 2028-29. Sales are expected to achieve mid-single-digit growth in the first half of 2026 and accelerate in the second half. We remain optimistic about the stock, believing it is poised to surpass the market's expected 38% sales growth rate in 2026, with sales potentially doubling in an optimistic scenario." The analysts pointed out that Astera Labs is well positioned to benefit from the long-term trends in AI infrastructure development. The company's goal is to achieve above-average growth by increasing sales of its products. The analysts also mentioned that Astera Labs' management believes investors are underestimating the opportunities for its expansion. Management commented that compared to 90 days ago, the company's prospects will only get better and they are very excited about the numerous market opportunities ahead. Malik and his team stated: "In the early stages of AI infrastructure deployment, the scale of expansion topologies or network architectures has already been determined, providing opportunities for Astera Labs' new products (such as copper cable or optical solutions). Therefore, the company has been continuously winning more design orders, the Scorpio product line is showing strong growth momentum, and the company is actively expanding into the optical field."