Astera Labs(ALAB.US) stock price drops over 16% after earnings report; investment banks focus on Amazon partnership and profit structure

2026-02-19 04:50:20

On Wednesday, Astera Labs (ALAB.US) became the focus of Wall Street attention, with multiple investment banks engaging in intense discussions about the company’s latest earnings report, guidance, and collaboration with Amazon (AMZN.US). Due to related uncertainties, Astera Labs’ stock price fell over 16%.

JPMorgan analyst Harlan Sur stated that the company’s recent quarterly performance was strong, with Scorpio “P” series, PCIe Gen6 re-timers, and Taurus network connectivity products continuing to grow, and guidance exceeding expectations. However, he also pointed out that Amazon’s acquisition of warrants, unfavorable SKU structure, and increased hardware sales ratio could weigh on future gross margins; additionally, accelerated M&A and R&D investments are expected to raise short-term expenses. Sur maintained an “Overweight” rating but lowered the target price to $205.

Morgan Stanley analyst Joseph Moore believes that Astera’s revenue growth is robust but partially offset by aggressive expansion plans; the first half of the year is a transitional period, and the upcoming volume of Scorpio X related to Amazon Trainium 3 is worth looking forward to. He maintained an “Overweight” rating and a $210 target price.

Needham analyst N. Quinn Bolton pointed out that the Amazon warrant transaction could bring up to $6.5 billion in potential additional revenue. Despite high valuation, Astera focuses on cloud and AI infrastructure connectivity, with strong growth prospects, and maintains a “Buy” rating with a $220 target price.

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