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Astera Labs ALAB is benefiting from strong demand for Aries, Taurus and Scorpio product families. Second-quarter 2025 revenues jumped 149.7% year over year and 20% sequentially, driven by signal conditioning (primarily Aries and Taurus product lines) and switch fabric (Scorpio). Signal conditioning portfolio benefited from strong demand for PCIe scale-up and Ethernet scale-out connectivity applications in custom developed application-specific integrated circuits (ASIC) platforms.
ALAB’s Aries product family is benefiting from diversification across both GPU and custom ASIC-based systems for a variety of applications, including scale-up and scale-out connectivity. Aries 6 solution that supports PCIe 6 began volume ramp within rack-scale merchant GPU-based systems during the second quarter of 2025. Continued deployment of AI and general-purpose systems at leading hyperscaler customers is benefiting the Taurus product lines.
Scorpio exceeded 10% of total revenues in the second quarter of 2025, making it the fastest ramping product line in the history of Astera Labs. Scorpio Fabric switches won multiple design wins in the reported quarter. ALAB continues to see strong demand for Scorpio P-Series and X-Series PCIe Fabric Switches. The company expects Scorpio X-Series to begin shipping for customized scale-up architectures in late 2025, with a shift to high-volume production over the course of 2026.
Astera Labs expects third-quarter 2025 revenues between $203 million and $210 million, suggesting an increase between 6% and 9% sequentially. The Zacks Consensus Estimate for revenues is pegged at $206.7 million, indicating 82.8% growth from the figure reported in the year-ago quarter.
Astera Labs faces stiff competition from the likes of Broadcom AVGO and Marvell Technology MRVL in the connectivity and high-speed interconnect domain.
Broadcom offers a broad portfolio of PCIe Switches that offer high performance with low latency and consume less power. These multi-purpose switches are highly flexible and configurable. Broadcom’s next-generation switches for data centers feature ExpressFabric technology. Its latest Jericho4 helps the company offer a complete portfolio of networking solutions that includes the Tomahawk 6, Tomahawk Ultra and NICs.
Marvell benefits from strong demand for electro-optics products, custom AI silicon and next-generation switches. The growing adoption of 800-gig PAM products and 400ZR data center interconnect solutions is fueling top-line growth.
Astera Labs shares have appreciated 31.5% year to date, outperforming the broader Zacks Computer and Technology sector’s return of 12.5% and the Zacks Internet Software industry’s growth of 19.4%.
The ALAB stock is trading at a premium, with a forward 12-month price/sales of 31.97X compared with the broader sector’s 6.66X. Astera Labs has a Value Score of F.
The Zacks Consensus Estimate for 2025 earnings is pegged at $1.58 per share, up 17% over the past 30 days, suggesting 88.1% growth from fiscal 2024’s reported figure.
Astera Labs, Inc. price-consensus-chart | Astera Labs, Inc. Quote
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This article originally published on Zacks Investment Research (zacks.com).
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