MW Astera Labs' stock is rocketing. Why analysts predict even more gains for the AI chip play.

By Emily Bary

Astera Labs' connectivity products are resonating in the AI era, and analysts see potential for big upside next year as a new offering ramps up

Astera Labs beat expectations with its second-quarter earnings. Analysts are upbeat about the future.

Astera Labs Inc.'s stock has been on a hot streak that's set to kick into new gear on Wednesday.

Shares of the maker of connectivity chips are up 18% in premarket action, which would build on their one-month gain of 49% and their three-month rise of 90% through Thursday's close.

Wall Street is cheering the company, which is seen as a play on the artificial-intelligence boom, given the need to help chips connect with the other components of data centers. Astera Labs (ALAB) is "hitting its AI product-cycle stride on three dimensions," Evercore ISI analyst Mark Lipacis wrote after Tuesday afternoon's earnings report.

For instance, he noted that the ramp of Astera Labs' Scorpio P Series, which are fabric switches for AI workloads, proved stronger than expected in the latest quarter at the company's leading customer, and Astera Labs is looking ahead to the ramp of several new designs next year. There's also meaningful interest in the company's X Series switches, which will be more of a story for next year.

Lipacis still predicts further upside despite the strong recent rally, lifting his price target to $215 from $104. Astera Labs shares closed at $135.54 on Tuesday and were indicating just above $160 based on Wednesday's premarket action.

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JPMorgan's Harlan Sur also projected more upside ahead as he boosted his target price to $180 from $100 and cheered the company's competitive positioning.

"We believe Astera's robust and expanding new product pipeline will continue to set a high bar for competitors," he wrote, noting that he expects the company to keep its command of the market for PCIe retimers, which recover and retransmit data.

Sur also pointed to "the plethora of new product ramps" that he thinks will sustain a "solid" pattern of sequential growth through the end of this year and into next year.

Jefferies analyst Blayne Curtis portrayed Astera Labs as a compelling play on the "lumpy and unpredictable" AI market given that the company "has the most upside to our estimates of any of our names." The FactSet consensus is for less than $2 in adjusted earnings per share in 2026, but Curtis thinks the company has a pathway to topping $3 in EPS.

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"Overall, the bar was high into the print and still well exceeded; expect continued beat-and-raise potential throughout the rest of the year and into next," he wrote. The "real show" will be next year's Scorpio X ramp, he noted, but Scorpio P made up more than 10% of overall revenue in the latest quarter, a positive surprise in its own right for investors.

-Emily Bary

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August 06, 2025 08:06 ET (12:06 GMT)

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