Key Highlights
- RBC Capital increased Astera Labs (ALAB) price target to $250 from $225, maintaining an Outperform rating
- The revised target reflects anticipated Trainium3-related Scorpio-X switch revenue beginning in Q3 2026
- RBC forecasts Scorpio switch revenue expanding from $130M in 2025 to $390M in 2026
- UBS launched coverage on ALAB with a Neutral stance and $180 price target, highlighting switching market competition
- ALAB delivered Q4 2025 EPS of $0.58, surpassing the $0.51 estimate, alongside 92% year-over-year revenue growth to $270.6M
Astera Labs experienced a notable Monday as two separate analyst firms weighed in with fresh coverage — offering contrasting perspectives on the stock’s trajectory.
Astera Labs, Inc. Common Stock, ALAB
RBC Capital elevated its price target on Astera Labs to $250 from $225, reaffirming its Outperform rating. Shares were changing hands near $175.80 during the session, representing approximately 10% gains.
RBC’s optimistic outlook hinges on Scorpio-X, Astera’s upcoming switch platform. Analysts at the firm anticipate that Trainium3-related Scorpio-X deployments will begin generating revenue during the third quarter of 2026, creating additional opportunity per XPU deployment.
The firm’s projections show total Scorpio switch revenue climbing from $130 million in 2025 to $390 million in 2026 — representing a threefold increase within a single year.
RBC’s updated $250 target applies a 74x multiple to the firm’s calendar year 2027 EPS projection of $3.37. The previous target utilized a 67x multiple. Analysts cited several new product launches, an expansive addressable market, anticipated revenue growth ranging between 40–50%, and gross margins exceeding 70% as rationale for the elevated multiple.
Astera’s current gross margin stands at 75.69%, accompanied by revenue growth of 115% over the trailing twelve months.
UBS Adopts a More Conservative Stance
UBS launched coverage on ALAB Monday as well, settling on a Neutral rating with a $180 target — marginally above the stock’s trading level at the time.
Analyst Natalia Winkler recognized that the company has established a legitimate presence in AI networking infrastructure over a five-year period, demonstrating solid execution with retimers and cultivating relationships beyond its primary customer, AWS. Astera introduced its retimer products in 2019 and has subsequently expanded adoption across multiple hyperscalers.
UBS anticipates 2027 revenues running 4% ahead of consensus, supported by retimers and the PCIe/UA Link switching product line. However, for 2028, UBS projects revenues 3% below consensus, pointing to intensifying competition in the switching market as a potential obstacle.
Valuation represents the primary concern for UBS. Astera commands a high-40s 2027 P/E multiple, significantly above AI networking competitors. The firm indicated it identifies more attractive risk-reward opportunities within other areas of the networking sector.
Recent Quarterly Performance Supports Growth Narrative
Both analyst perspectives build upon a robust recent earnings release. Astera posted Q4 2025 EPS of $0.58, exceeding the $0.51 consensus estimate by nearly 14%.
Quarterly revenue reached $270.6 million, marking a 92% year-over-year increase.
Twelve analysts have revised their earnings projections upward for the forthcoming period, based on InvestingPro data.
The stock has delivered 223% returns over the past year. Following that substantial appreciation, ALAB’s PEG ratio of 0.47 indicates the valuation may remain reasonable despite the headline P/E of 143 — particularly when adjusted for growth prospects.
RBC’s $250 target represents approximately 42% upside from prevailing levels. UBS’s $180 target offers minimal appreciation from the current price point.
