William Blair analyst Sebastien Naji has maintained their bullish stance on ALAB stock, giving a Buy rating yesterday.
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Sebastien Naji has given his Buy rating due to a combination of factors that highlight Astera Labs, Inc.’s strategic positioning and growth potential. The company’s recent acquisition of aiXscale Photonics is a significant step in expanding its interconnect portfolio into optics, which is crucial as higher data rates necessitate optical solutions over shorter distances. This move allows Astera to leverage its software and algorithmic strengths in the optical domain, aligning with the industry’s shift towards copackaged optics.
Despite the acquisition not being immediately accretive, its success could significantly enhance Astera’s long-term revenue prospects. Furthermore, while there are concerns about the competitive landscape for PCIe/UALink-based solutions, the strong demand for AI, the growth potential from Amazon’s Scorpio project, and the continued success of Astera’s Aries retimer/AEC products are expected to drive substantial growth. These factors, coupled with the recent dip in stock prices, suggest a potential upside, justifying the Buy rating.
In another report released yesterday, Morgan Stanley also maintained a Buy rating on the stock with a $200.00 price target.