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Astera Lab ALAB shares are currently overvalued, as suggested by its Value Score of F.
In terms of the forward 12-month Price/Sales, ALAB is trading at 15.59X, higher than the industry’s 7.09X.
Price/Sales (F12M)
Image Source: Zacks Investment Research
ALAB is also expensive compared to its industry peers, including Broadcom AVGO, Credo Technology and Nova, which currently trade at forward 12-month Price/Sales of 13.66X,12.25X and 6.85X, respectively.
ALAB shares have also plunged 48.3% in the year-to-date period, underperforming the broader Zacks Computer & Technology sector’s decline of 9.1% and the Zacks Electronics - Semiconductors industry’s decrease of 13.5%. The decline is attributed to concerns over the lower-than-expected gross margin driven by a shift in product mix toward hardware-based solutions.
ALAB Underperforms Sector, Industry
Image Source: Zacks Investment Research
However, strong demand for its Aries PCIe Retimer and Taurus Ethernet Smart Cable Module products, which saw high demand for AI scale-up and scale-out connectivity, has been noteworthy.
Hence, investors should ask this question: can ALAB sustain its growth despite concerns over its valuation and gross margin pressures?
ALAB Unveils Scorpio Smart Fabric for NVIDIA MGX Platforms
ALAB’s increasing demand for AI platforms, particularly those leveraging high-performance GPUs and AI accelerators, drove strong design wins and sales for products like Aries Retimers, Taurus Smart Cable Modules, and Scorpio Fabric Switches.
Building on this momentum, ALAB recently introduced its Scorpio Smart Fabric Switches for PCIe 6-ready NVIDIA NVDA Blackwell-based MGX platforms, delivering high-performance, modular scalability for AI and cloud infrastructure.
With comprehensive design-in collateral and interoperability validation in its Cloud-Scale Interop Lab, ALAB enhances NVIDIA MGX platform integration by optimizing GPU utilization, improving energy efficiency, and enabling advanced rack-level management through its COSMOS software.
Astera Labs Powers AI Advancements With Top Chipmakers
Astera Labs has made a significant impact on the AI industry with collaborations with top chipmakers, including NVIDIA, Advanced Micro Devices AMD, Micron Technology, and Intel.
Astera Labs products are used in NVIDIA’s GB200 product. The PCIe switch is expected to play a key role in future NVIDIA products. This collaboration further emphasizes Astera Labs’ influence in the development of advanced AI technologies.
AMD also continues to utilize Astera Labs solutions to enhance the efficiency and scalability of its AI-driven products. The partnership strengthens both companies’ positions in the AI market, fueling advancements in next-gen technologies.