BMO Makes Major Bullish Call on Astera Labs

Astera Labs' stock fell 17.5% to $184.10 after TD Cowen cut its price target to $225, maintaining a Hold rating. The company reported record Q3 2026 revenue of $584.9M, up 154% YoY. Other analysts also adjusted targets, with mixed ratings. Broader sector selloff, regulatory concerns, and weak chip earnings contributed to the decline.

Astera Labs (ALAB) fell 12% despite guiding Q4 revenue to $730M-$750M, above estimates. Dell (DELL) and Applied Materials (AMAT) also dropped due to broader chip sector declines tied to phone and memory costs. Astera's Q3 revenue rose 154% to $584.9M, its fourth consecutive beat.

BMO Capital Markets initiated coverage of Astera Labs (ALAB) with an outperform rating and a $375 price target, suggesting 68% upside. The company is seen as a key player in AI networking, addressing infrastructure challenges. Shares have fallen 30% in three months amid semiconductor sector declines, but analysts remain bullish on its long-term prospects in AI and cloud infrastructure.

Astera Labs (ALAB) reported Q3 2026 revenue of $584.9M, up 154% YoY and 49% sequentially, with net income of $182.9M. Analysts revised price targets, with Morgan Stanley raising its target to $389, while others cut theirs. The average target fell to $365.90, implying 57% upside. ALAB also announced product sampling plans and a board resignation.

Astera Labs (ALAB) shares dropped 8% premarket Nov. 4 despite Q3 results beating expectations and a Q4 outlook exceeding consensus. Analysts' views diverged, with Morgan Stanley confident in growth and Bank of America maintaining a Neutral rating due to valuation concerns.

Astera Labs (ALAB) reported Q3 results with non-GAAP gross margin of 72.4% and operating margin of 44.7%, but free cash flow declined. Management maintained long-term gross margin guidance near 70%, raising concerns about profitability. The article also highlights three other companies potentially undervalued by 25% to 49% according to the author's estimates.