Shares of Astera Labs, Inc. (ALAB) plummeted 7.37% during intraday trading on Wednesday, as a sharp wave of profit-taking wiped out an initial surge of over 11% that followed the company's stellar second-quarter results.

The reversal came despite the company reporting better-than-expected Q2 earnings and issuing third-quarter revenue guidance of $540–$560 million, far exceeding the $417 million consensus estimate. The stock had initially rallied in pre-market and early regular trading, but gains quickly evaporated as investors locked in profits from the stock's substantial prior rally.

Broader weakness in the semiconductor sector added to the selling pressure, with high-beta momentum names facing headwinds as peers like Advanced Micro Devices and Intel also traded lower. The decline reflected a broader rotation out of richly valued AI-related stocks, even as multiple Wall Street analysts raised their price targets on Astera Labs following the earnings beat.