Why Astera Labs Stock Plummeted This Week

Core Viewpoint - Astera Labs experienced a significant stock sell-off, with a 19.3% decline, amid broader market valuation concerns despite no specific business news [1][2]. Group 1: Stock Performance - Astera Labs stock fell 19.3% during the week, contrasting with minor declines in the S&P 500 and Nasdaq Composite, which dropped 0.3% and 0.7% respectively [1][2]. - Despite the recent sell-off, Astera Labs' stock is still up 49% in 2025, indicating strong performance over a longer timeframe [6]. Group 2: Valuation Concerns - The decline in Astera Labs' stock price is attributed to general valuation concerns in the market, exacerbated by comments from Federal Reserve Chair Jerome Powell regarding high stock valuations [2][4]. - Powell's remarks about equity valuations being potentially stretched led to widespread selling of growth-dependent stocks, including Astera Labs, resulting in a significant valuation contraction [5]. Group 3: Financial Guidance - Astera Labs provided guidance for Q2 sales to be between $203 million and $210 million, suggesting a year-over-year growth of approximately 83% at the midpoint of the range [7]. - The company is currently valued at about 42 times this year's expected sales, indicating a high degree of risk despite its strong growth momentum [7].