IPO Stock Of The Week and artificial intelligence leader Astera Labs (ALAB) is attempting to find support at a key benchmark this week. The AI stock is one of the best names to watch on Investor’s Business Daily’s IPO Leaders screen.
Astera Labs makes connectivity chips for cloud and artificial intelligence data centers. Astera’s products are focused on high-speed data transfer and overall system bandwidth expansion in data-center computing systems. Its products address critical bottlenecks in AI infrastructure.
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In early October, the chipmaker introduced a new family of data-center switches built for AI infrastructure. The company announced its Scorpio Smart Fabric Switch portfolio, including the industry’s first PCIe 6 switch. The PCIe 6 specification doubles the bandwidth and power efficiency of the PCIe 5 specification. PCIe stands for Peripheral Component Interconnect Express, a type of connection used for high-speed data transfer between electronic components.
On Nov. 4, Astera reported earning an adjusted 23 cents a share on sales of $113.1 million in the September-ended quarter. Analysts polled by FactSet had expected earnings of 17 cents a share on sales of $97.5 million. Astera Labs’ revenue soared 206% vs. the year-ago period, according to IBD MarketSurge.
Fourth-quarter earnings results are due Feb. 10. Analysts expect the AI chipmaker to earn 26 cents a share on revenue of $127.9 million. Those are year-over-year jumps of 116% and 153%, respectively, per IBD MarketSurge.
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AI Stock Rebounds From Important Level
On Nov. 21, the AI chip stock cleared a 100.06 high-handle entry on a consolidation that started in late March, soon after the new issue began trading. Shares quickly rallied more than 47% from that point, eventually peaking on Jan. 6 at 147.39.
Now, the AI stock has pulled back to potential support at its 10-week moving average line. With the 10-week line currently valued around 122, that places the buy zone from there up to 128.10.
If the stock is able to mount a significant rebound, look for the stock’s relative strength line to also improve. It hasn’t fallen too much during the stock’s pullback.
IBD Stock Checkup shows that Astera stock has a strong IBD Composite Rating of 97 out of 99.
Be sure to follow Scott Lehtonen on X at @IBD_SLehtonen for more on the Dow Jones Industrial Average and the stock market today.
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