Did Jim Cramer Get These 23 Stocks Right?

10. Astera Labs, Inc. (NASDAQ:ALAB)

Number of Hedge Fund Holders: 51

On the topic of hot IPOs, Jim Cramer gave his comprehensive input on Astera Labs, Inc. (NASDAQ:ALAB) at the time:

“Astera Labs which makes connectivity hardware for data centers; exactly what you need for the fastest Cloud setup. And thanks to the AI connection this one came in hot! Astera Labs priced its IPO at $36 per share, way above the initial proposed range. Then the stock opened at 52 bucks last Wednesday. If you got into on this deal you instantly made a 46% gain and it didn’t stop there. The stock’s been gaining ground every day, climbing another $15 to $85 today, that’s a 21%. […] But I do hate to see it because it tells me that the stock’s probably already overheated. […] Long story short as stars clearly position your as a new way to play the AI theme, they even namedropped Nvidia in the prospectus, though it’s unclear what their exact relationship is. Astera Labs says that it’s one of the hardware companies that’s going to benefit as we rebuild data centers all across the world for the more advanced computing needs to be in the AR era.  That’s true to be fair they’re probably right. But even if you take Astera’s claims in face value, I still take issue with valuation because this thing exploded right out of the gate it’s going too high.

When you dig deeper into the financials it’s hard to justify paying up too much for this one. The best thing I can say about Astera’s numbers is they’ve got good sales growth up 45% last year. But man, when you look at that rough share count this is now valued as a 13 billion dollar company; that’s well over a hundred times last year’s sales.

Bottom line, well, Astera Labs has a good story and it is good I think it’d be worth owning at some price but I think it’s way too expensive at this price.”

Astera Labs, Inc. (NASDAQ:ALAB) has fallen by 18.82% since Cramer commented on its IPO valuation.

On the 27^th of August, Cramer was wary of Astera Labs Inc. (NASDAQ:ALAB)’s initial 72% surge and advised caution, as it seemed overpriced.

“The ninth-largest deal of the year is Astera Labs, which makes connectivity solutions for AI and cloud infrastructure—nice buzzwords there, but it sounds enticing. I didn’t like that it spiked 72% right out the gate—I told you so a few days later—just seemed way too expensive.”