Nvidia Supplier Astera Labs Surges on Strong Q3 Results

Astera Labs (ALAB) shares are jumping around 30% Tuesday morning, after the Nvidia (NVDA) supplier reported on Monday strong third-quarter earnings results on the back of demand for its artificial intelligence (AI) products.

The company, which makes chip-based connectivity products to boost the efficiency of AI, reported quarterly revenue of $113.1 million, up 47% from the prior quarter and 206% year-over-year, while showing a net loss of $7.6 million, or 5 cents a share.

It also forecast fourth-quarter revenue of between $126 million and $130 million and earnings per share between 4 cents to 6 cents.

Astera’s Customers Include AMD, Intel

Astera, which went public in March, said in its initial public offering (IPO) filing that its customers include several key players in the AI space. Apart from Nvidia, they include Advanced Micro Devices (AMD) and Intel (INTC).

In a note released Monday, Jeffferies analysts said the company “looks to be firing on all cylinders heading into 2025.”

“Lots to love about this report with strength across a combination of products with demand from both NVDA and multiple AI ASIC platforms (likely AMZN & GOOG),” the broker said. Jefferies has given the stock a buy rating with a $69.65 price target.

An application-specific integrated circuit (ASIC) is a custom-designed chip built for a specific use or application. 

Astera shares are up about 71% so far for the year.