Astera Research Institute reported fourth-quarter profits that beat sales and bottom line, but the stock fell by as much as 10% as sales fell short of some analysts’ expectations.
Here’s how artificial intelligence infrastructure and semiconductor companies’ performance compares to LSEG’s consensus estimates.
Earnings per share: 58 cents vs. 51 cents expected Earnings: $271 million vs. $250 million expected
Fourth-quarter revenue increased 92% year-over-year. However, some analysts had expected the company to report revenue of more than $280 million in the same period.
Astera Labs reported net income of $45 million for the quarter, an 82% increase from $24.7 million in the year-ago period. The company said it expects first-quarter revenue to be between $286 million and $297 million, beating Wall Street’s estimate of $259 million.
“We founded the company eight years ago to really serve the cloud and AI infrastructure space,” Astera Labs CEO Jitendra Mohan told CNBC on Tuesday. “And luckily for us, this space is on fire.”
Mohan said the higher profit was due to growth in Scorpio Fabric Switches and Taurus Ethernet Cables, which together accounted for 30% of total revenue.
“The bottleneck is increasingly moving from compute to connectivity, and connectivity is our role,” Mohan said. “This gives us many opportunities to continue to grow in the AI space and outpace the overall market growth rate.”
In addition to reporting its financial results, the company also announced that its finance chief, Mike Tate, is resigning. Desmond Lynch is currently the financial director of a semiconductor company. lambuswill succeed Tate effective March 2. Tate will remain at Astera Labs as a strategic advisor to the CEO.
Additionally, Astera Labs announced Tuesday that it has issued a new warrant. Amazon The company will purchase a stake in the chip company for approximately $466 million. Amazon owned $43 million in Astera Labs stock as of Dec. 31, according to regulatory filings.
Astera Institute also announced Monday that it will establish a research and development center in Israel.
“We are really constrained by resource availability more than anything else,” Mohan said. “Opening a design center in Israel is therefore a step towards accessing the available talent pool.”
Astera Labs was founded in 2017 by former Texas Instruments executives. The company went public in 2024 and has signed deals with the following companies: Nvidia, AMD, intel and Amazon As a customer of that tip.
–CNBC’s Jordan Novet contributed to this report
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