StockNovice (Joe) | February 2026
Strong beat. ALAB posted 270.6mrevenuevs 250m consensus — about $20m upside. That's +92% YoY and +18.6% QoQ. For context: they guided $245-255m. Coming in at $270.6m when the high end of your guide was $255m is a real beat, not a marginal one.
FY25 totals: $852.5m, +115% YoY. Two years ago this was a $17.7m/quarter company. The growth has been extraordinary.
The metrics:
| Metric | Q4 FY25 | Q4 FY24 | YoY |
|---|---|---|---|
| Revenue | $270.6m | $140.8m | +92% |
| Gross Margin [Non-GAAP] | 75.7% | 77.3% | -160bps |
| Op Margin [Non-GAAP] | 40.2% | 35.3% | +490bps |
| EPS [Non-GAAP] | $0.58 | $0.36 | +61% |
| FCF (FY25) | $281.8m | — | 33.1% margin |
Product mix is shifting fast. Scorpio P crossed >15% of revenue. Ares (PCIe retimers) is still the core but Taurus (Ethernet cables) is up 4x+, and Scorpio X (fabric switches) just started shipping. The story is broadening beyond PCIe retimers.
Here's my honest read:
What's "is": Astera is delivering today. 92% growth at scale (nearly $1B run rate), 40% non-GAAP operating margins, $282m FCF for FY25. Scorpio P is real and growing. Amazon is a major customer with a $6.5B warrant through 2033 — that's not vaporware, that's a contractual relationship.
What's "could be": Scorpio X ramp, CXL memory platform (the Microsoft/Intel/SAP partnership), the $25B TAM expansion thesis. The Scorpio X just started shipping. CXL is genuinely early. These are real opportunities but they haven't shown up in the revenue line in a meaningful way yet.
I don't use "could be" to size positions. Story elements get tryout-sized at most.
This is the thing I keep coming back to. Q4 beat hard. But Q1 FY26 guide is $286-297m — midpoint $291.5m. That's +7.7% QoQ sequential growth. Annualize that and you're looking at ~37% growth. Compare that to:
This is not a slight decel. This is a steep staircase down. Yes, comparisons get harder. Yes, new products are ramping. But the guide tells me the hyperscaler order cadence is lumpy and the next step-function acceleration (Scorpio X, CXL) hasn't arrived yet.
I've watched enough of these plays to know the danger zone: the quarter where you beat and raise big... and then the following quarter's guide disappoints relative to what the beat implied. ALAB is at that inflection. The beat was real. The guide implies they know the deceleration is coming.
Mike Tate is out. Desmond Lynch in as of March 2. CFO changes are on my red flag list — not automatic sells, but they require explanation. The company said it was planned. Maybe so. But I've learned not to dismiss C-suite changes when results are simultaneously showing deceleration. This is something I'm watching.
Atlas noted this too. "Not alarming but merits attention." Agreed.
I've owned CRDO instead of ALAB for this AI connectivity theme, and I don't regret that. Here's why:
| ALAB Q4 FY25 | CRDO Q3 FY25 | |
|---|---|---|
| Revenue Growth (YoY) | +92% | ~200%+ |
| Non-GAAP GM | 75.7% | ~63% |
| Forward decel risk | High (guide implies ~37%) | Lower (from a smaller base, more room to run) |
| P/S | ~33x TTM | Lower |
CRDO has lower margins but is growing roughly 2x the rate at a better multiple. For a growthy connectivity play at this moment, CRDO is the better bet in my view. ALAB has better margins but is further along its S-curve. That makes ALAB's valuation problem harder to solve.
I could be wrong — Scorpio X ramp could surprise to the upside in Q2/Q3. The Amazon warrant relationship is genuinely differentiating. But right now, CRDO is the better risk/reward in this space.
33.7x TTM revenue for a company decelerating toward 37% growth. Let me put that in context: that's pricing in a lot of Scorpio X and CXL acceleration that hasn't shown up yet.
I use P/S as a relative tool, not a DCF-generator. But at 33x for decelerating growth, ALAB needs everything to go right just to justify the current price — let alone grow from here. Atlas put it well: "priced for acceleration while guiding deceleration." That's the tension.
Prior: Watchlist. Watching Scorpio P adoption and whether the product mix broadened enough to justify the premium. CFO risk noted.
Updated: Thesis intact but tension increased. The beat was real, Scorpio is ramping, FCF is excellent. But:
Still watchlist. Not adding. If I didn't own CRDO, ALAB would be a tryout candidate — but I do own CRDO, and sizing two plays in the same theme doesn't make sense when one is clearly cheaper and growing faster.
Beat-and-raise? Yes on the beat. The raise is modest — $291.5m midpoint vs $270.6m. Sequential guide implies the growth engine is slowing.
Thesis intact? Yes, but stretched. Scorpio is real. Amazon is a real partner. FCF is excellent. Management credibility is mostly intact (CFO change is a watch item).
Position: Watchlist. Not adding.
What changes my mind: Scorpio X surprising to the upside in Q2/Q3 FY26. CXL revenue showing up meaningfully. CFO transition handled smoothly with no guidance revisions down.
As usual, thanks for reading.