Lowering the target price being bearish! Citigroup restates buy rating on Astera Labs (ALAB.US), saying Scorpio switch will reshape the 2028 profit curve.

Citibank published a research report, lowering the target price of Astera Labs, Inc. (ALAB.US) from $250 to $200, while maintaining a "buy" rating on the stock. Citibank stated that the target price reduction was mainly based on a valuation adjustment in the field of artificial intelligence (AI), but the bank remains optimistic about the company's opportunities in the "Scorpio" product line, believing that the growth logic remains unchanged. Citibank also pointed out that as the trend of AI scale expansion continues to evolve, Astera Labs is expected to significantly benefit and become a major beneficiary of the growing demand for AI infrastructure. Analysts further explained in the research report that the company's business is transitioning towards PCIe switches (especially the Scorpio series), and profit levels are expected to significantly increase by 2028. In addition, Co-Packaged Optics (CPO) will complement, not replace, this core opportunity. Overall, the market remains optimistic about Astera Labs, with 78% of the 23 analysts covering the stock maintaining a "buy" rating. The 12-month average target price implies a potential upside of over 72% from the current level. Astera Labs focuses on providing high-performance connectivity solutions for AI data centers, including retimers, switches, and interconnect technologies. With the increasing demand for efficient data transfer in AI workloads, strong analyst support, and the market's growing recognition of its role as a core enabler of AI infrastructure, the company has a solid foundation to achieve significant long-term growth, supporting its high-growth investment logic.