Astera Labs shares slide 10% after revenue falls short of some expectations — even as the company posted a solid fourth-quarter earnings beat, surprising investors who had hoped for even stronger top-line numbers.
Astera Labs, which specializes in artificial intelligence infrastructure and semiconductor connectivity solutions, reported better-than-expected earnings per share but failed to fully impress the market on revenue. As a result, the stock dropped by as much as 10% following the announcement.
Quarterly Results at a Glance
Here’s how Astera Labs performed compared with consensus estimates from LSEG:
Earnings per share: 58 cents vs. 51 cents expected
Revenue: $271 million vs. $250 million expected
While revenue jumped an impressive 92% year over year, some analysts had been forecasting quarterly sales above $280 million, creating disappointment despite the strong growth rate.
Revenue Growth Still Robust
Astera Labs reported net income of $45 million for the quarter, up sharply from $24.7 million a year earlier — an 82% increase. Looking ahead, the company issued upbeat guidance, projecting first-quarter revenue between $286 million and $297 million. That outlook comfortably exceeds Wall Street’s expectation of $259 million.
Speaking to CNBC, CEO Jitendra Mohan emphasized the company’s long-term positioning in cloud and AI infrastructure.
“We started the company eight years ago to really service the cloud and AI infrastructure space,” Mohan said. “And fortunately for us, the space is on fire.”
Key Products Driving Growth
Mohan credited the earnings beat to strong demand for the company’s Scorpio fabric switch and Taurus ethernet cables. Together, these products contributed roughly 30% of total quarterly revenue.
As AI systems grow larger and more complex, Mohan noted that performance constraints are increasingly tied to data movement rather than raw computing power.
“The bottleneck is shifting from compute to connectivity,” he explained, highlighting Astera Labs’ opportunity to outpace broader AI market growth.
Leadership Changes and Strategic Moves
Alongside earnings, Astera Labs announced a leadership transition. Chief financial officer Mike Tate will step down from his role, with Desmond Lynch — currently CFO at Rambus — set to take over effective March 2. Tate will remain with the company as a strategic advisor to the CEO.
The company also disclosed issuing a new warrant that allows Amazon to purchase approximately $466 million worth of Astera Labs stock. As of December 31, Amazon already held $43 million in shares, according to regulatory filings.
Expansion in Israel and Growing Customer Base
Astera Labs recently announced plans to open a new research and development center in Israel, aiming to tap into the region’s deep engineering talent pool.
“We are really bottlenecked by the availability of resources more than anything else,” Mohan said, adding that the new design center is a key step toward scaling innovation.
Founded in 2017 by former executives from Texas Instruments, Astera Labs went public in 2024. Since then, it has secured major customers including Nvidia, AMD, Intel, and Amazon — reinforcing its growing role in the AI hardware ecosystem.
Despite the market’s short-term reaction, the company’s rapid revenue growth, strong guidance, and expanding partnerships suggest Astera Labs remains a key player to watch in the AI infrastructure space.
