Astera Labs says its Scorpio X-Series exits 2026 above a $1 billion run rate; one customer is 53%
Finance chief Nick Aberle told BMO's technology conference on November 12 that the Scorpio X-Series switch line, at slightly above zero revenue in Q1, will exit 2026 above a $1 billion annualized run rate. The stock closed that day at $227.79, below both its moving averages and about $93 under the consensus target.
Vincent Jiangthree-minute read
From slightly above zero to a $1 billion run rate
At BMO Capital's Technology and Innovation Leaders conference on November 12, Astera Labs−4.30% — Astera Labs, down 4.30 percent today finance chief Nick Aberle put a number on the company's fastest ramp 12. The Scorpio X-Series, the switch that connects AI accelerators inside a server, booked slightly above zero revenue in the first quarter and should exit 2026 at an annualized run rate well above $1 billion 12. A run rate projects one quarter's pace across a year; it is not booked revenue. Two hyperscalers ship it today, with four or five customers expected by year end and a pipeline of possible buyers in the teens for 2027 1.
He also priced the silicon per XPU, the accelerator chip at the heart of an AI server, at about $50 four years ago and upwards of $1,000 today, with a path to doubling every generation 1. Astera's take per accelerator has risen about twentyfold in four years, and the stock has still lost a quarter of its value in three months 13.
Analysts cut targets after a 154% quarter
The quarter behind the talk was a record: $584.9 million of revenue, up 154% year over year, with the fourth quarter guided to $730 million to $750 million 4. The stock still closed November 12 at $227.79, below its 50-day and 200-day averages, about $93 under the $320.85 consensus target 5. TD Cowen's November 4 cut to $225 sits below the share price; RBC, Evercore+0.34% — Evercore, up 0.34 percent today, UBS and Susquehanna trimmed theirs after the results 56.
Revenue has risen nearly eightfold in nine quarters, and the Q4 guide points higher
- Revenue
- Estimate
Data
| Revenue | |
|---|---|
| Q2 '24 | $76.85M |
| Q3 '24 | $113.09M |
| Q4 '24 | $141.1M |
| Q1 '25 | $159.44M |
| Q2 '25 | $191.93M |
| Q3 '25 | $230.58M |
| Q4 '25 | $270.58M |
| Q1 '26 | $308.36M |
| Q2 '26 | $392.4M |
| Q3 '26 | $584.9M |
| Q4 '26 guide (estimate) | $750M ($730–750M) |
Only TD Cowen's target sits below Astera's $227.79 close
TD Cowen's $225 is the only analyst target under the stock's November 12 close
Data
| Price target | |
|---|---|
| Morgan Stanley | $389 |
| BMO | $375 |
| Consensus | $320.85 |
| Northland | $315 |
| TD Cowen | $225 |
One buyer at 53%, and a thinner margin
The filings behind the hesitation are plain. One direct customer took 53% of third-quarter revenue and the top three took 77%, a concentration The Inference flagged on November 4 7. Gross margin fell 390 basis points from a year earlier to 72.3% as lower-margin Scorpio hardware took over the mix, and the fourth-quarter guide holds it near 72% 47. Inventory has tripled since December to $200.9 million 4.
Gross margin peaked at 76.3% and slides as Scorpio hardware takes over
Down 390 basis points year over year, and guided to hold near 72%
- GAAP gross margin
- Estimate
Data
| GAAP gross margin | |
|---|---|
| Q4 '24 | 74% |
| Q1 '25 | 74.9% |
| Q2 '25 | 75.8% |
| Q3 '25 | 76.2% |
| Q4 '25 | 75.6% |
| Q1 '26 | 76.3% |
| Q2 '26 | 73.3% |
| Q3 '26 | 72.3% |
| Q4 '26 guide (estimate) | 72% |
Insiders sold $126 million while Amazon opened a stake
Insiders sold about $126.1 million of stock last quarter, including chief executive Jitendra Mohan's $30.8 million tax-withholding sale and director Manuel Alba's $51.3 million under a pre-arranged plan 5; Amazon−1.16% — Amazon, down 1.16 percent today, which also holds a warrant agreement with the company, opened a $134.2 million stake in the second quarter 45.
What has to hold through Q4
BMO, the host bank, initiated at Outperform with a $375 target that week; Morgan Stanley+0.55% — Morgan Stanley, up 0.55 percent today carries $389 6. AWS is ramping the sibling P-Series switch across Nvidia's−3.21% — Nvidia, down 3.21 percent today GB200 and GB300 racks, with Vera Rubin racks to follow 1. The fourth-quarter report settles the argument either way: the guide implies about 27% sequential growth 3, and the premium survives only if margin holds near 72% while the X-Series broadens past the customer that already carries most of the revenue.
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