Why Astera Labs Stock Is Up Today

Astera Labs (ALAB 6.60%) shares rose in trading on Wednesday. The company’s share price ended the daily session up 6.6 percent, according to data from S&P Global Market Intelligence. Shares rose as much as 10.4% earlier in the session.

Shares of Astera Labs received a significant boost thanks to bullish coverage published yesterday evening from analysts at Morgan Stanley. Analysts cited sales opportunities related to artificial intelligence (AI) and other rising technology trends as key factors in their case.

Astera is rising in rising valuations and price target

After the market closed yesterday, Morgan Stanley issued an upbeat note on Astera Labs. The financial services company raised its rating from equal weight to overweight and maintained a one-year price target of $55 a share on the stock.

Astera Labs closed Tuesday’s trading price at $39.11 per share, and bullish coverage from Morgan Stanley quickly drove prices higher in today’s daily session. At the time of the note, Morgan Stanley’s target had an implied upside of about 41%. Even after today’s earnings, the analyst target still suggests about 32% upside.

What’s next for Astera stock?

Astera Labs had its initial public offering in March and has seen volatile trading throughout its relatively short history as a publicly traded company. The stock has been climbing steadily, but is now down about 32% from the market close on the day of its public debut. Valued at roughly 18.8 times this year’s expected sales, the company also continues to have a highly growth-dependent valuation.

ALAB PS Ratio data (before) by YCharts. PS Ratio = price-sales ratio.

Part of the stock’s recent volatility stems from uncertainty over whether Astera Labs will win significant business in the Nvidiathe upcoming Blackwell G200 processors. Astera could rise if the company wins substantial contracts with Nvidia or other top tech companies that can contribute to higher sales growth, but the stock remains a high-risk, high-reward play.