Astera Labs (ALAB) strong today and back over 21 EMA with 1000 October $50/$80 call spreads bought into the close for $3.20 as the beaten down Tech IPO from March looks to have formed a bottom near 40 after its earnings report on 8/6 formed the low and since then has put in a decent base pattern. ALAB has seen its short float rising to 6.5% now since being just 3% back in June so not ideal for a name in a downtrend but potential now to see at least a snapback rally off these lows with a volume pocket of space above 47 and up towards its value area high this year at 56. ALAB has also seen some recent buyers of Oct $45 and $55 calls and more interesting is the large size opening put sales in open interest for 6000x July 2025 $40 puts sold at $6.50 last month. 

The $7B semiconductor equipment stock trades at 61x earnings, 14x sales, and is expected to see sales grow +44% in FY25. ALAB designs, manufactures, and sells semiconductor-based connectivity solutions for cloud and AI infrastructure. Its Intelligent Connectivity Platform is comprised of a portfolio of data, network, and memory connectivity products, which are built on a unifying software-defined architecture that enables customers to deploy and operate high performance cloud and AI infrastructure at scale.

Craig Hallum has a $75 target on the stock and notes Astera’s strong Q2 results and even better Q3 guidance, combined with commentary on next-gen PCIe content in AI servers and products ramping into the AI backend network, should provide strong support for the stock.