Is Astera Labs the Next Big AI Stock?

AI stocks are all anyone can talk about these days, so it's no surprise to see a hot new artificial intelligence stock hitting the market via an IPO. Astera Labs is a data center connectivity startup seeking $100M in an IPO that could launch as soon as March 2024. The proposed IPO valuation will be around $4 billion.
Astera supplies networking chips to cloud operators, putting it right in the heart of a few exciting disruptive themes like cloud computing and AI. Sounds like a lot of hype waiting to happen. Watch our video to see our thoughts on Astera Labs and the current AI hype.
RESEARCH PIECES USED IN THIS VIDEO:
1. How to Invest in the Singularity - It’s Near
www.nanalyze.com/2017/06/inve...
2. Investing in Disruptive Tech IPOs
www.nanalyze.com/2020/12/inve...
CHAPTERS:
00:00 Intro
01:18 The AI scuttlebutt
02:23 Gartner's hype cycle
03:52 What Astera does
06:39 Astera's financials
07:42 Customer concentration risk
08:55 What we're doing
10:01 IPO hype
ABOUT US:
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$Astera
#AsteraLabs
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#ipostockreview
#ipostockanalysis

[@Nanalyze]

People have asked how they can support our work. Our monthly Nanalyze Premium subscription is our version of Patreon ;) www.nanalyze.com/subscription-plans/

[@rickyrizzo7350]

thxs for the info

[@Nanalyze]

You're most welcome

[@sublyme2157]

IT guy here. Yes, longer cables are always welcome. Cables are used to connect storage arrays to compute arrays, which are then connected to switches, and then to other devices downstream, like backup appliances and such. Sometimes these devices are in the same rack, but more often then not, they're not. Usually we need cables up to 20 feet, occasionally longer. Storage and compute hardware has a 3 to 5 year life cycle. When those devices get replaced, the cables get replaced as well, and they're usually supplied by the reseller. And that's where the real money comes in. As an example, Cisco charges TENS OF THOUSANDS for their Cisco branded cables. Even though the generic versions of these cables can be bought for pennies online, Cisco will only support you if you buy Cisco branded cables. If Astera Labs wants customers to use their cables over the inevitable knock offs, they'll need to create the need.

[@Nanalyze]

Thank you so much for taking the time to share your subject matter expertise Sublyme! Much appreciated and we all benefit from the insights.

[@smileypc44]

Thanks for this info, I’m very interested in the stock

[@shefudgrupa]

Astera have a great team of top engineers from Marvell and Arista and did churn out some very interesting products so far for datacenter connectivity. When I was working on these topics in Huawei, our main competitors were Marvell and then Arista, so I assume these guys have the smarts and the product market fit to drive some good business going forward. I like what the gentlemen at Kandou bus are doing as well.

[@Nanalyze]

This is a very useful comment, thank you.

[@shefudgrupa]

@@NanalyzeI am not a datacenter architect, but I do have one comment on the cable length issue . As most modern setups are TOR (with switch on top of rack), the cables have to reach all the way to top with same datarate. And that is where passive coaxial high-speed ethernet cables fail, and where much more expensive and power consuming (active) cables come in. If one manages to make double the length passive and robust ethernet cables, or replace active optical cables with active copper cables, given the volume, such a company hits jackpot.

[@Nanalyze]

@@shefudgrupa Really appreciate you taking the time to provide additional color!

[@midwestcannabis]

You are a gem.👌✌️

[@Nanalyze]

Thank you for the kind words!

[@midwestcannabis]

@@Nanalyze Thanks for the hard work!

[@bluevanyar3]

The best chanel ever I hope the best for you Please do another planet labs PL video

[@Nanalyze]

You are so kind, thank you! As soon as PL releases 2023 year end results we will either do a video or an article.

[@GrindThisGame]

Do you ever share your portfolio performance numbers?

[@Nanalyze]

Short answer, no. You can always torture the data and make it say whatever you want. We did an academic paper on our Quantigence strategy and it spanked the S&P 500. We'll be releasing videos on this.

[@azulsimmons1040]

So Astera Labs competes with NVDA Infiniband for connectivity solving the data throughput problem for other GPU producers? Or are they complimentary with NVDA networking? I will look at it. I only recently did enough research to understand how Infiniband helped NVDA leap ahead of its competitors in the GPU data center business. Before I found that info, I could not understand how NVDA leaped so far ahead.

[@Nanalyze]

Good question. They don't cite NVIDIA as a competitor in their S-1, instead talking about "collaboration with data center infrastructure suppliers such as NVIDIA."

[@moonboy5851]

Looking good! Could be a leader

[@Nanalyze]

Extremely overpriced

[@moonboy5851]

@@Nanalyze appreciate the honesty!

[@mccutch22]

How about doing one on Poet Technologies, Optical Interposer?

[@Nanalyze]

That would be way too small to be on our radar tbh

[@Royal30424]

What is the ticket in the stock?

[@Nanalyze]

Doesn't appear that they've decided on a ticker yet

[@JustStartingOut-nt8ve]

Interesting. So, they make a buffer with error correction capability. This makes sense.

[@Nanalyze]

Incidental exposure to the expansion of data centers

[@MrGriff305]

And the bubble begins ... Anything that says A.I. is BUY BUY BUY 🤣

[@Nanalyze]

BUY BUY BUY!!!! ;)

[@Permanente95]

Embrace the bubble, but be skeptical

[@user-wh8df2cu2v]

Bubble? welcome i buy all low price 😂😂

[@55wmlo]

That’s how I’m rn

[@Nanalyze]

Here's a piece we did on AI hype: kzbin.info/www/bejne/eXybpmOtrtmde7M

[@user-us3bq9zn5t]

NVDA 😣, How about PANW?

[@Nanalyze]

Well, plenty of people are asking about that. These companies are probably cramping PANW's style: kzbin.info/www/bejne/qoC7ZJmpbNJ7hqs

[@ht5603]

As a stock investor in Taiwan, it's crucial to have a deep understanding of the characteristics and operating models of the Taiwanese electronics industry to make informed investment decisions. In terms of Taiwan's electronics distribution agents, they typically do not represent multiple brands of homogenous products, especially when it comes to key components. In other words, brand manufacturers do not allow their distributors to sell products from competing brands.

[@Nanalyze]

Very interesting stuff, thank you for sharing!

[@steenpedersen8526]

Was it a yes, maybe or no to the initial question?

[@Nanalyze]

That's a fair question. Not sure it was explicitly answered. After watching the video, what would you think based on our findings?

[@steenpedersen8526]

@@Nanalyze Sounds like you keep all options open. Im new at this so I dont have much of a clue.

[@Nanalyze]

We wouldn't consider this to be an AI stock. After their IPO they are also extremely overpriced.

[@mbabcock111]

Copper cables and signal repeaters? I thought the overall industry plan was a transition to glass or fixed wireless.

[@Nanalyze]

Good question. Hoping to hear from some data center workers. Maybe you are one? Is this just a "nice to have?"

[@mbabcock111]

@@Nanalyze some initial questions: - why forward face and be accountable to shareholders? - is this a FOMO grab for an overpriced IPO? - is capital raises too expensive to their bottom line? - is the IPO a way to fund the development of alternate glass product options? - are they one big contract pivot away from severe losses? - looking at their literature, it looks really easy to update their documentation with the word AI.

[@Nanalyze]

All good questions, thank you for posing them!

[@redslate]

Copper still dominates.

[@aaron6806]

"Put things into context when the hype starts". Indeed. Another great video. Now if only I wasn't a fomoholic.......

[@Nanalyze]

It's very tough not to gravitate towards fomo to be honest. It's why everyone should have a rules-based approach .

[@JustStartingOut-nt8ve]

It IPOed today.

[@Nanalyze]

Sure did and it's ridiculously overpriced. Watch other "AI IPOs" follow.

[@nauy]

Nothing to do with AI. Next!

[@Nanalyze]

Incidental exposure to the growth of data centers it seems

[@Jay-sf4zj]

Alphawave Semi is my pick in the connectivity space

[@Nanalyze]

We'll take a look.

[@bash5552]

No moat there.

[@Nanalyze]

Possibly the chips they're using in the cables? They would have some IP moat. one would presume.

[@andybrothers6750]

@@Nanalyze They have been using chips like that for ethernet cables for years, It seems more like a commodity product and won't have much staying power.

[@Nanalyze]

@@andybrothers6750 Definitely being hyped because of AI