TRADE ALERT: Buy Astera Labs; Soon A Must-Own Stock For Institutions

I target $140 per share by the end of 2026. I’m excited that Astera Labs is completely debt-free with nearly $1 billion in cash, giving it tremendous firepower to scale.

Executive Summary

• Astera Labs (ALAB) returns to Deep Value Returns as a buy recommendation.

• Follow the Inflection strategy, put 2.5% of your capital into ALAB today. And a further 2.5% in the next 4 to 6 weeks, aiming to bring your average cost lower. Trust me, a lower price point nearly always comes.

• Never put more than 5% of your portfolio in any DVR stock. No matter what.

• Once you have 5% allocation, sit on your hands for 12 to 18 months.

Investment Thesis

I recommend buying Astera Labs (ALAB).

In a nutshell, this is my thesis. As an Inflection investor, I like to buy into companies that operate debt-free. If a business is debt free, and with a meaningful amount of cash on its balance sheet, and is cutting its path towards increasing its free cash flow profile, good things can happen.

If, on top of that, the business could be on a path to $1 billion of revenues by 2026, this will make Alab a must-have for institutional investors, who will be willing to pay a high premium for this company.

As a result, I believe that paying 160x next year's free cash flow for ALAB is a bargain.

Price target of $140 per share by the end of 2026.

My Thought Process

Every single investment carries a risk. So, when I buy a stock and recommend it to you, as a paying subscriber, I have to think, what sort of risks am I taking here? And am I willing to take them?

Beyond the company-specific risks with Astera Labs, there’s another layer I need to manage: portfolio concentration. Holding Astera Labs alongside Credo Technology and Nebius puts me heavily exposed to the same sector. That’s a risk I take seriously.

Ideally, Nebius moves closer to $60 soon, so I can exit that position and reduce my overall exposure to this space.

I’m also mindful that I’m already sitting on 20% cash. And while I still believe the market is reasonably priced, I don’t want to let too much cash sit idle. My goal is to deploy it strategically. But I can't afford to lower my standards.

Given all that, here’s why I’m now buying — and recommending to you — Astera Labs (ALAB).