Astera Labs shares drop 20% as JPMorgan cuts target to $205
Astera Labs shares dropped about 20% to $146.82 after JPMorgan lowered its price target to $205 from $215. JPMorgan maintained an overweight rating, highlighting Scorpio and Taurus PCIe retimers fueling AI data-center demand, forecasted Q1 revenue of $291 million and adjusted EPS of $0.53 alongside expected gross margins near 70%.
1. Stock Plunge and Trading Action
Astera Labs shares plunged approximately 20% to close at $146.82, reflecting investor reaction to the analyst update and Q4 financial metrics.
2. JPMorgan Rating and Price Target
JPMorgan reiterated its overweight rating on Astera Labs while trimming its price target to $205 from $215, citing both near-term headwinds and long-term AI infrastructure growth.
3. AI Product Lines Driving Growth
The firm emphasized the Scorpio “P” Series and Taurus Gen 6 PCIe retimers as key drivers of the company’s surpassed-expectations revenue, noting strong adoption by major data-center operators.
4. Financial Outlook and Margin Expectations
JPMorgan projects first-quarter revenue of $291 million with adjusted EPS of $0.53, and forecasts gross margins to ease toward 70% in 2026 due to hardware sales mix and specific customer agreements.