PresentationQuinn BoltonNeedham & Company, LLC, Research Division Welcome back, everybody, to the second day of Needham's 28th Annual Growth Conference. My name is Quinn Bolton. I'm the semiconductor analyst for Needham. My pleasure to host this fireside chat with Astera Labs founded in 2017 and headquartered in San Jose, California. Astera Labs provides rack scale AI infrastructure through purpose-built connectivity solutions, the company's intelligent connectivity platform integrates CXL, Internet, NVLink ...

Company Overview - Astera Labs has experienced significant stock volatility since its IPO, with a decline of over 60% from late December highs, followed by a recovery and a period of relative strength [1][4] - The company specializes in semiconductor-based connectivity solutions for cloud and AI infrastructure, offering products such as high-speed connectivity integrated circuits and modules used in data centers [2] Partnerships and Collaborations - Astera Labs has strengthened its partnership with Nvidia, integrating NVLink Fusion into its connectivity platform, which is crucial for the development of large language models and agentic AI models [3] Financial Performance - Astera Labs reported second-quarter earnings of 44 cents per share, exceeding consensus estimates by 33.3%, with revenues of $191.93 million surpassing projections by 11.1% [9] - The company has achieved a year-over-year bottom-line growth of 238% and a top-line improvement of 150% [9] - For the upcoming quarter, Astera expects adjusted earnings of 39 cents per share on sales of $206.5 million, higher than Wall Street's forecasts [10] Market Position and Trends - Astera Labs is part of the Zacks Internet – Software industry group, which ranks in the top 32% of approximately 250 industries, indicating potential for outperformance in the market [5] - The stock has advanced over 200% since April lows, reflecting strong investor interest and positive earnings estimate revisions [12] Technical Indicators - The stock has shown strong technical performance, finding support at both the 50-day and 200-day moving averages, and has been making a series of higher highs [14] - Empirical research suggests a correlation between stock movements and earnings estimate revisions, indicating that continued earnings beats could sustain the stock's bullish trend [15]

Core Viewpoint - The artificial intelligence boom is gaining momentum, with tech stocks, particularly semiconductor companies, leading the market recovery since April [1] Company Summary - Astera Labs specializes in semiconductor-based connectivity solutions for cloud and AI infrastructure, offering a range of products including intelligent connectivity platforms and high-speed integrated circuits [2] - The company is enhancing its partnership with Nvidia by integrating NVLink Fusion into its connectivity platform, which is crucial for the development of advanced AI models [3] - Astera's stock (ALAB) has shown strong performance, making higher highs since April, supported by increasing trading volume and investor interest [4][15] Industry Summary - Astera is part of the Zacks Internet – Software industry group, which ranks in the top 25% of approximately 250 industries, indicating potential for outperformance in the next 3 to 6 months [5] - Stocks in this industry are expected to experience above-average earnings growth, providing a favorable environment for price increases [5][8] Earnings Trends - Astera has consistently exceeded earnings expectations since its IPO, with a 17.9% earnings beat in Q1 and a trailing four-quarter average earnings surprise of 28.4% [10] - Analysts have raised full-year earnings estimates by 0.75% to $1.35 per share, reflecting over 60% growth compared to the previous year, alongside a 77% increase in revenues [11] - For Q2, analysts anticipate a 154% year-over-year increase in adjusted earnings to 33 cents per share and a 125% rise in revenues to nearly $173 million [12] Technical Indicators - ALAB stock has advanced nearly 90% since April, indicating strong upward momentum [15] - The stock has found support at both the 50-day and 200-day moving averages, which are trending upwards, suggesting continued positive performance [17] - Positive earnings estimate revisions are correlated with near-term stock movements, indicating that as long as Astera continues to deliver earnings beats, the bullish trend is likely to persist [18]