TLDR
- Astera Labs stock crashed 10% Wednesday, opening at $212 versus previous close of $230.11
- Intel-Nvidia chip partnership announcement triggered sell-off fears about competitive threats
- Stock hit worst single-day performance since April with 3.8 million shares traded
- Analyst ratings split between downgrades and price target increases up to $275
- Despite drop, ALAB maintains 55% year-to-date gains and 300% twelve-month returns
Astera Labs shares plummeted nearly 10% on Wednesday in the semiconductor company’s worst trading session since April. The stock opened at $212, down sharply from Tuesday’s $230.11 close, before sliding to $203.87.
Trading volume exploded to 3.8 million shares as investors dumped positions. The selloff wiped approximately $4 billion from Astera Labs’ market capitalization.
The decline started September 19 when Morgan Stanley highlighted a new Intel-Nvidia partnership to develop PC and data center chips. The investment bank warned this collaboration could impact Astera’s business, though specific risks weren’t detailed.
Wall Street Divided on ALAB Stock Outlook
Analyst opinions remain sharply divided following recent developments. Northland Securities downgraded Astera Labs from “outperform” to “market perform” with a conservative $120 price target.
Conversely, Citigroup raised its price target from $160 to $275 while maintaining a “buy” rating. Morgan Stanley also increased its target from $155 to $200 with an “overweight” recommendation.
The consensus among 19 analysts shows a “moderate buy” rating with an average price target of $152.94. This suggests potential upside from current levels despite recent volatility.
Strong Fundamentals Despite Market Turbulence
Astera Labs delivered impressive second-quarter results that initially drove stock gains. The company reported earnings of $0.44 per share, beating estimates by $0.11.
Revenue reached $191.93 million, representing 149.5% year-over-year growth. The company maintained healthy margins with a 16.54% net profit margin and 9.53% return on equity.
For Q3 2025, management guided earnings between $0.38-$0.39 per share. Full-year analyst estimates project $0.34 earnings per share.
Insider Activity Raises Questions
Company executives have been active sellers recently. CEO Jitendra Mohan sold 152,517 shares in August for nearly $26 million, reducing his stake by 25%.
CFO Michael Truett Tate also sold 100,000 shares worth approximately $17.1 million. Combined insider sales totaled over 1.5 million shares valued at $239 million in three months.
Despite Wednesday’s decline, Astera Labs stock maintains impressive performance metrics. Shares remain up 55% year-to-date and nearly 178% over six months. The twelve-month return approaches 300%.
The stock trades at 375 times earnings with a beta of 1.48, indicating higher volatility than broader markets. Current market capitalization stands at $34.95 billion.
Technical indicators show the stock above key moving averages. The 50-day moving average sits at $175.65, while the 200-day average reaches $112.14.
Institutional investors own approximately 60.47% of outstanding shares, with several funds increasing positions during Q2. This institutional backing provides some support during volatile periods.
Astera Labs’ 50-day moving average currently stands at $175.65, with institutional ownership at 60.47% of total shares outstanding.
