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Earnings Analysis

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Summary

Let me start with dessert. The first red flag that I see is valuation, as ALAB trades at 72x forward earnings, making it the priciest name among its closest peers.

The second red flag that I see is the Amazon warrant deal, which I perceive as an intricate customer discount program.

That said, I am bullish on the stock and I own a small position.

The Scorpio product line is the main pillar to the growth story, with management expecting it to become the largest product line by year-end 2026.

Additionally, the optical pipeline could expand silicon content beyond $1,000 per XPU, in my view, supporting double digit growth through 2026 and 2027.

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I initiate coverage on Astera Labs ( ALAB ) with a strong buy, despite the fact that the stock sits at an uncomfortable point in the AI trade, as it’s no longer undiscovered (as noted by its forward

Analyst’s Disclosure: I/we have a beneficial long position in the shares of ALAB, MRVL, AVGO…