Astera Labs shares rallied 76.1% in May after reporting strong earnings and raising guidance amid a bullish outlook for its new Scorpio X fabric switch.

In fiscal Q1, Astera Labs reported revenue of $308.4 million (up 93.5%) and adjusted earnings of $0.61 (up 84.8%), beating analyst estimates. Management guided to $360 million in revenue at the midpoint for the current quarter, representing 26% quarter-over-quarter growth.

On May 19, Astera stock rose over 17% at one point after CEO Jitendra Mohan presented at the J.P. Morgan Global Technology, Media and Communications Conference and Evercore ISI raised its price target from $215 to $297. Mohan said the newly introduced Scorpio X fabric switch should become the company's largest product by sales by end of year.

Analysts cited low-cost-per-token inference (the efficiency of AI producing answers) and the need for connectivity across GPUs, CPUs, ASICs, and memory as drivers of Astera's growth. Astera is up 250% over the past year and currently trades at 105 times this year's earnings estimates.