Needham cuts Astera Labs stock price target on AI sector valuation

RBC Capital kept Astera Labs at Outperform but cut its price target to $400 from $500, a 20% reduction. This implies a 71.2% upside from the Nov 3 close of $233.62. Other recent targets for Astera range from $258 to $311.

Astera Labs (ALAB) reported Q3 2026 revenue of $584.9M, up 49% sequentially and 154% YoY. Growth was driven by the Scorpio X-Series, which surpassed P-Series in revenue. The company launched new products, including Aries 7 and Leo 2, and expanded its customer base. Management expects continued growth and increased design wins, with AI infrastructure demand strengthening.

Astera Labs (ALAB) fell 4% despite reporting record revenue and guiding Q4 revenue 13% above consensus, due to political concerns after Democrats' midterm wins. Q3 revenue rose 154% YoY to $584.9M, above estimates. Forward P/E hit a one-year low. Neocloud CoreWeave (CRWV) and Nvidia (NVDA) are also affected.

Northland upgraded Astera Labs (ALAB) to Outperform with a $315 price target, citing strong Q3 results and raised guidance. The Scorpio switch family exceeded $1B annual run rate, driving 98% revenue growth over the last year. Despite a 21% stock drop, ALAB trades above Fair Value. Other analysts lowered price targets due to valuation concerns.

Astera Labs (ALAB) reported Q3 revenue of $584.9M, up 154% YoY, beating estimates. Non-GAAP EPS was $1.32 vs. $1.19 expected. Non-GAAP operating margin widened to 44.7%, but gross margin slipped to 72.4%. Q4 guidance: revenue $730M-$750M, non-GAAP EPS $1.62-$1.66. Inventory rose to $200.9M.

UBS lowered its price target on Astera Labs (ALAB) to $290 from $300, citing valuation concerns and compressed semiconductor sector multiples. The stock has fallen 21% in the past week. UBS raised revenue and earnings estimates for 2026-2028, forecasting $7.82 EPS by 2028. Astera Labs reported strong Q3 2026 results, with revenue up 154% year-over-year and adjusted earnings of $1.32 per share, beating estimates.