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Astera Labs Inc shares are up 23.4% to $89.54 in November following the company's impressive third-quarter earnings beat Wall Street expectations, reinforcing its role as a critical player in AI infrastructure.

What To Know: Astera reported earnings of 23 cents per share, exceeding the estimated 17 cents, alongside revenue of $113.1 million, up 206% year-over-year and well above analyst forecasts of $97.4 million.

CEO Jitendra Mohan highlighted that the company achieved its fifth consecutive quarter of record-breaking revenue, with sales rising 47% from the previous quarter, driven by new growth in AI connectivity solutions.

Astera's latest product, the Scorpio Smart Fabric Switch, is central to its strategy. These switches are designed to enhance data transfer speeds between GPUs, CPUs and storage devices, addressing critical needs in AI data centers where performance demands are skyrocketing.

Read Also: Ray Dalio’s Bridgewater Cuts Stake In Microsoft Stock By 20% – Is Big Tech Losing Its Shine?

What Else: The company's strong performance and promising product pipeline prompted multiple analysts to raise their price targets.

JPMorgan increased its target to $110 per share, while Deutsche Bank, Barclays and others made upward revisions.

Astera's revenue forecast for the fourth quarter of $126–$130 million, alongside expected earnings of 25 cents to 26 cents per share, has added momentum to investor enthusiasm.

Read Also: Disney Q4 Earnings: Revenue And Profit Beat, Best Film Studio Performance, 3-Year Outlook And More

How To Buy ALAB Stock

Besides going to a brokerage platform to purchase a share – or fractional share – of stock, you can also gain access to shares either by buying an exchange traded fund (ETF) that holds the stock itself, or by allocating yourself to a strategy in your 401(k) that would seek to acquire shares in a mutual fund or other instrument.

For example, in Astera Labs’ case, it is in the Information Technology sector. An ETF will likely hold shares in many liquid and large companies that help track that sector, allowing an investor to gain exposure to the trends within that segment.

According to data from Benzinga Pro, ALAB has a 52-week high of $100.09 and a 52-week low of $36.22.

© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

The Q3 earnings season is on track to show another quarter of positive earnings growth. In fact, the +7.6% earnings growth in Q3 will be the 5th quarter in a row of positive year-over-year earnings growth. If we look at aggregate earnings growth excluding the Energy sector drag, Q3 earnings would be up a much healthier +10.1%.

We have yet to see Q3 earnings results from most of the conventional or brick-and-mortar retailers, with Walmart WMT, Target TGT and others on deck to report results in the coming days. We know from other consumer-facing companies that have reported results already that consumer spending remains stable, with households continuing to spend at a healthy clip.

We know already that the lower end of income distribution has been under pressure. We have also known for some time now that consumers have been leaning more towards spending on services like leisure, travel, dining and hospitality and ignoring other discretionary products. This spending behavior has proved a headwind for operators that are heavily indexed towards discretionary merchandise or big-ticket items. Target has a heavier exposure to such discretionary merchandise and has been struggling as a result of this unfavorable spending behavior.

There have been some recent indicators suggesting a shift in this behavior, with demand for these discretionary services starting to ease. We don’t know if this emerging trend simply reflects pre-election jitters among consumers or the sign of an enduring shift. But if it is the start of a shift in spending behavior, then it would be welcome news for Target and others, as some of those dollars can be expected to start paying for discretionary merchandise. Walmart had noted at the time of its last earnings call that also suggested some signs of improvement in their discretionary merchandise.

With respect to the Q3 scorecard, we now have results from 460 S&P 500 members or 92% of the index’s total membership. Total earnings for these companies are up +6.8% from the same period last year on +5.3% higher revenues, with 73.7% beating EPS estimates and 61.3% beating revenue estimates.

For more details about the Q3 earnings season and evolving expectations for the coming periods, please check out our weekly Earnings Trends report here >>>>Looking Ahead to Retail Sector Earnings

Zacks Investment Research

• The Federal Trade Commission is preparing to launch a probe into anti-competitive practices at Microsoft's cloud computing business, the Financial Times reports, citing people with direct knowledge of the matter.
• The FTC, which is yet to formally request documents or other information from Microsoft as part of the inquiry, is looking into allegations that Microsoft is abusing its market power in productivity software by imposing punitive licensing terms to prevent customers from moving their data from its Azure cloud service to competitors' platforms, the FT reports, citing sources.
• Some of the alleged practices include increasing subscription fees for those that leave, charging steep exit fees, and allegedly making its Office 365 products incompatible with rival clouds, the FT reports.

Full article at https://www.ft.com/content/62f361eb-ce52-47c1-9857-878cfe298d54

Write to sabela.ojea@wsj.com; @sabelaojeaguix