Ahead of its upcoming initial public offering (IPO), Astera Labs has boosted its estimated price range from $27-$30 to $32-$34. The company plans to offer 19.8 million shares, up from 17.8 million. At the midpoint of the new range, Astera's IPO is expected to raise $653.4 million. After the public offering, with 155.46 million shares outstanding, including underwriters' shares, the company would have a top valuation of $5.3 billion. This decision comes amid investor enthusiasm around artificial intelligence (AI). Astera Labs appears well poised to ride the AI wave and future growth predicted for the industry. The IPO is scheduled for Wednesday, March 20, under the ticker symbol ALAB.
Who Is Astera Labs?
Founded in 2017, Astera Labs Inc. provides connectivity chips and cloud infrastructure management software. The company’s founders believed that AI models would grow large enough to be practical only on a cloud-scale basis. They predicted that continued growth in processing power for AI systems would rely on powerful, connected compute elements (such as GPUs) at a massive scale to create distributed AI workloads. While competitors built accelerators with enormous computing power, Astera addressed this challenge. They focused on how to connect these elements into a high-performance AI cluster. The Silicon Valley company started in a garage with products that addressed AI infrastructure bottlenecks.
What The Experts Are Saying
Although the company is not yet profitable, its net loss shrunk from $58.3 million in 2022 to $26.3 million in 2023. Revenue has increased from $79.9 million in 2022 to $115.8 million in 2023. Principal shareholders include Fidelity Management and Research and Sutter Hill Ventures. With the company’s mission to deliver connectivity solutions for AI and cloud infrastructure, analysts believe that they could benefit from investors’ recent surge of interest in AI. Astera Lab’s relationships with infrastructure suppliers like Intel, Nvidia and Advanced Micro Devices, as well as hyperscalers (large cloud service providers), could boost their position further.
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