Astera Labs makes Nasdaq debut amid AI boom

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By Imelda Cotton - 
Astera Labs NASDAQ ALAB AI artificial intelligence technology

Astera Labs (NASDAQ: ALAB) made its Nasdaq debut last month with a market capitalisation of $9.68 billion as it tapped into investor enthusiasm for artificial intelligence.

The California-based company sells high-speed data transfer technology for AI computing and other cutting-edge data centre applications.

It is the first big technology firm to go public this year and according to experts, it shows that Wall Street’s demand for AI-linked companies remains strong.

Chip companies are seen as the main beneficiaries of the AI boom as businesses race to adopt the technology, bolstering the demand for advanced semiconductors used in data centres.

Initial public offering

In early March, Astera launched an initial public offering to raise up to $534 million.

It consisted of a total 19.8 million shares, of which about 16.8 million were by the company and roughly 3.01 million shares were being sold by existing investors at $36 each.

That price valued the company at around $5.5 billion — a figure that has swelled to around $8.9 million at its current trading price.

Astera said it had several notable industry relationships with hyperscalers which could help the company gain traction amid the AI boom.

In its filing with the Securities and Exchange Commission, the company reported “trusted relationships with the leading hyperscalers and collaboration with data centre infrastructure suppliers” including Nvidia, Advanced Micro Devices and Intel.

Revenue boom

Astera has witnessed a boom in recent revenues underpinned by AI’s need for massive amounts of data moving into, out of and around data centres.

After generating $79.9 million in 2022, the company’s revenue jumped 45% in 2023 to $115.8 million (an increase of nearly $80 million) against a net loss of $26.3 million ($58.3 million in 2022).

The figures began growing dramatically on a quarter-by-quarter basis, from $10.7 million revenue in the second quarter to $36.9 million in the third, and $50.5 million by the last quarter of the year.

Astera said the growth was driven by a “significant increase in demand for [its] products” and was a sign of things to come.

“We have made significant investments in the design and development of new products and platform enhancements and, as a result, [we have] a history of net losses and [have] not yet achieved profitability on an annual basis,” it said.

Leadership changes

In November, Astera announced a series of leadership changes to drive corporate growth, strategic development and product innovation.

The company appointed Elli Castro-Bordano to the role of vice president, deputy general counsel; Chris Petersen as fellow, technology and ecosystems; and Kelvin Khoo as senior vice president, corporate development.

Chief operating officer and co-founder Sanjay Gajendra said the appointments had been made at a critical time in the company’s history.

“Astera is scaling rapidly, and I am delighted to welcome [these people] to our team during this pivotal time as we seek to expand our leadership in purpose-built connectivity solutions for cloud and AI infrastructure,” he said.

“These new appointments and those that will follow in the near future will help us seize the growth opportunities ahead and chart a course for even more success.”

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