IPO Stock Of The Week and artificial intelligence leader Astera Labs (ALAB) is breaking out to record highs, topping an alternate entry. The AI chip stock is one of the best stocks 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 Lab’s revenue surged 206% vs. the year-ago period, according to IBD MarketSurge.
“Our business has now entered a new growth phase with multiple product families ramping across AI platforms based upon both third-party GPUs (graphics processing units) and internally developed AI accelerators,” Chief Executive Jitendra Mohan said in a news release.
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AI Stock Hits Latest High
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 jumped around 22% this past week, breaking out past that entry. The 5% buy zone runs up to 105.06.
A flaw is the unusual depth of the base. It’s 62% deep from peak to trough.
On the upside, the stock’s relative strength line is at new highs, confirming the AI stock as a market leader.
Finally, IBD Stock Checkup shows that Astera stock has a 93 out of 99 IBD Composite Rating. That makes the AI stock a top idea to watch right now.
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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