Astera Labs ALAB is set to report its first-quarter 2026 results on May 5.
Astera Labs expects first-quarter 2026 revenues between $286 million and $297 million. Earnings per share are expected to be between 53 cents and 54 cents for the first quarter.
The Zacks Consensus Estimate for first-quarter 2026 revenues is currently pegged at $292.50 million, indicating an increase of 83.45% from the figure reported in the year-ago quarter.
The consensus mark for earnings is currently pegged at 54 cents per share, unchanged over the past 30 days, suggesting 63.64% growth year over year.
Astera Labs, Inc. Price and EPS Surprise
Astera Labs, Inc. price-eps-surprise | Astera Labs, Inc. Quote
ALAB’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average earnings surprise of 22.64%.
Let’s see how things have shaped up prior to this announcement.
Factors to Note for ALAB’s Q1 Earnings
Astera Labs’ first-quarter 2026 revenues are likely to have benefited from increasing demand for artificial intelligence (AI) servers and data center infrastructure. Strong momentum across its three key product families, Aries, Taurus and Scorpio, is likely to have contributed well.
ALAB's Aries and Taurus product lines are also expected to contribute significantly to the first quarter of 2026 growth. The Aries portfolio, particularly its Gen 6 PCIe DSP retimer solutions, is benefiting from increasing deployments of custom AI accelerators at large hyperscalers. The Taurus family, which saw revenues grow more than fourfold in 2025, is driven by the ramp of new 400-gig designs for AI and general-purpose systems. The transition to 800-gig switching platforms is anticipated to be the next catalyst for Taurus, further expanding its market opportunity.
Scorpio, particularly the P-Series, will remain a key growth driver in the to-be-reported quarter. The P-Series continues its volume ramp at lead customers and is set to commence shipments to at least two additional major hyperscalers on their next-generation AI platforms. Initial volumes of the Scorpio X-Series for scale-up switching are also expected to have contributed to the first quarter of 2026 revenues, with a more material ramp anticipated in the second half of the year. The Scorpio family is on track to become ALAB's largest product line, reflecting the company's leadership in PCIe 6 switching solutions.
However, challenging macroeconomic uncertainties and stiff competition remain a headwind. For the first quarter of 2026, Astera Labs expects its non-GAAP gross margins to be hurt by a higher mix of hardware-based solutions. Operating expenses will also rise due to increased R&D investments and recent acquisitions.
ALAB Shares Outperform Sector, Industry
Astera Labs shares have risen 17.1% in the year-to-date period, outperforming the broader Zacks Computer and Technology sector’s return of 8% and the Zacks Internet Software industry’s decline of 10.2%.
ALAB Stock Performance
Image Source: Zacks Investment Research
Astera Labs' stock is not so cheap, as the Value Score of F suggests a stretched valuation at this moment.
In terms of the forward 12-month Price/Sales, ALAB is trading at 22.46X, higher than the industry’s 3.92X.
ALAB Valuation
Image Source: Zacks Investment Research
ALAB Faces Stiff Competition
Despite an expanding portfolio and strong partner base, ALAB is facing stiff competition from other industry players like Marvell Technology MRVL, Credo Technology CRDO, and Cisco Systems CSCO. Marvell Technology, Credo Technology, and Cisco Systems are all expanding their footprints in the AI infrastructure space.
Marvell Technology’s expanding portfolio has been noteworthy. In March 2026, Marvell Technology announced a major expansion of its 1.6T optical DSP platform portfolio, advancing the industry’s transition from 800G into 1.6T next-generation AI data center connectivity.
In March 2026, Credo Technology announced a definitive agreement to acquire DustPhotonics to vertically integrate its optical connectivity stack, combining SerDes, Digital Signal Processing and silicon photonics for next-generation AI and hyperscale networks. The deal strengthens Credo Technology’s optical roadmap, expands its addressable market and enhances cost efficiency and reliability in high-speed interconnects, positioning it to exceed $500 million in optical revenues by fiscal 2027.
Cisco has been integrating AI into its product portfolios across networking, security, collaboration and observability. Strong demand for Cisco’s products in developing AI infrastructure has been a game-changer for the company. In the second quarter of fiscal 2026, AI infrastructure orders from hyperscalers hit $2.1 billion, and Cisco expects more than $3 billion in AI infrastructure revenues from hyperscalers in fiscal 2026.
Conclusion
Astera Labs is expected to benefit from a strong portfolio and partner base amid rising costs and stiff competition. A stretched valuation somewhat dims the stock’s appeal ahead of first-quarter 2026 results.
ALAB currently has a Zacks Rank #3 (Hold), which implies that investors should wait for a more favorable entry point to accumulate the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).