Astera Labs: Impending Revenue Implosion in Plain Sight

Attractive trading opportunity.

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A brief note on ALAB 0.00%↑ because several people have pinged me on this name in the last month or so.

Astera Lab’s revenue is about to implode. This information is public and in plain sight, but many seem to have missed it.

[GB200 NVL72] The Mainframe of Doom

I previously made the call that GB200 NVL72/36 integrated mainframes would have massive traction and share of the Blackwell platform right after GTC. This was the right call based on engineering-driven investment analysis.

Source

This is good for ARM 0.00%↑ which I highlighted in this post back when ARM was trading at < $120/share.

NASDAQ:ARM is Comically Undervalued

Sidenote: I was not expecting ARM to rise ~50% in less than two months. This is an absolutely crazy valuation. Holding on to my 0.6% weight position but be careful investing into ARM at the current price of $178/share. Softbank secondary offering has to be incoming.

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Anyway… what does this have to do with Astera Labs?

Facts:

1. The vast majority of ALAB revenue is from PCIe re-timer chips. (> 95%)

2. By far, the two largest customers are NVDA 0.00%↑ and AMZN 0.00%↑

   1. Amazon has purchase-volume based warrants which incentivizes them to single-source.

   2. Nvidia does not want to prop up AI semi-custom ASIC vendors such as AVGO 0.00%↑ and MRVL 0.00%↑ so there is a strong incentive to continue single-sourcing.

3. ALAB has ZERO CONTENT in GB200 NVL systems.

Exhibit A: HGX Blackwell platform with PCIe re-timers circled in red.

Exhibit B: Grace-Blackwell Platform with ZERO ALAB PCIe RETIMERS. Red traces are where PCIe goes from the slots to the Grace CPU.

Re-timers extend reach and help with loss (how long the channel is) and reflections (how many connectors, medium changes, …) there are. A short, simple channel that only passes through a single PCB (no backplane, no extra connectors/cables) does not need re-timing.

Astera Lab’s revenue from their largest customer is about to get cut in half. The evidence is in plain sight.

This ticker is an attractive short candidate. Unfortunately, I cannot participate because of ethical reasons.

Normal analysts rate stocks with terms like “Outperform”, “Market Perform”, and so on.

My rating for ALAB 0.00%↑ is “imminent violent sinusoid”.

No idea what the amplitude or frequency of the sinusoid will be, but this ticker is definitely going way down because of Grace-Blackwell then will recover later because of Trainium/Inferentia.

Good luck, have fun.