The shares of Astera Labs (NASDAQ:ALAB), which is being viewed by some as an artificial intelligence (AI) infrastructure play, start trading today on the Nasdaq exchange. The firm says that its “semiconductor-based connectivity solutions… unleash the full potential of cloud and AI infrastructure.” The initial public offering (IPO) of ALAB stock was priced at $36 per share earlier today.
Here are seven other things that investors interested in Astera should know about the firm and its IPO.
- The initial “target range” for the IPO of ALAB stock was $27-$30. The firm subsequently increased the range on Monday to $32-$34.
- Astera believes that chips can become more efficient by interfacing with other components of data centers.
- Astera says that it has made deals with the largest AI chipmakers, including Nvidia (NASDAQ:NVDA) and Advanced Micro Devices (NASDAQ:AMD).
- The firm reported a net loss of $26.3 million for 2023.
- Astera expects to obtain about $713 million from the IPO.
- Based on its IPO price of $36, Astera has a huge price-sales ratio of about 47 times.
- But on a positive note, the firm generated a profit of $14.3 million last quarter.
Astera and ALAB Stock Are AI-Adjacent
The company’s top line surged 45% to $1115.8 million last year. The firm is benefiting from increased spending by data centers that AI has triggered, but it’s “not an AI company,” Nick Einhorn, vice president of research at Renaissance Capital, told TechCrunch. Einhorn indicated that the firm’s move into the black last quarter may be an isolated event that will not become a trend anytime soon.
Founded in 2017, Astera’s CEO is Jitendra Mohan, who also launched the firm. Before founding the company, he was a product line director at Texas Instruments (NASDAQ:TXN).
On the date of publication, Larry Ramer did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
