New York, Feb 11, 2026, 18:00 EST — After-hours
- Astera Labs (ALAB) tumbled 21.4%, losing roughly $39 to finish at $143.71.
- Amazon-linked warrants connect potential share issuance with as much as $6.5 billion in future purchases.
- Mike Tate, CFO, will retire on March 2. Desmond Lynch is set to take over the role.
Astera Labs, Inc dropped 21.4% Wednesday, shares settling at $143.71 after a bruising $39 slide. The chip connectivity stock hovered near that mark post-close. Volume hit about 16.4 million shares, with trades moving between $141.68 and $166.00.
This shift is catching attention. Investors these days aren’t just chasing growth in the AI infrastructure supply chain; they’re drilling down into margin strength and who’s actually buying. So, when one of the major cloud customers gets more assertive with its suppliers, markets quickly wonder what concessions the vendor might have made.
Astera’s recent filings bring back a familiar headache for high-velocity chip firms: just a few customers can steer the whole top line—and call the shots on contracts. The upside is volume, but pricing turns unpredictable. And when the setup starts to smell like a giveaway, shares can take a beating.
Astera disclosed in an SEC filing that it struck a transaction agreement with Amazon.com on Feb. 5, issuing a warrant that gives Amazon.com NV Investment Holdings LLC rights to buy as many as 3,262,299 shares at $142.82 each. According to the filing, the warrant vests in stages as Amazon and its affiliates make qualifying purchases of up to $6.5 billion in Astera’s smart fabric switch, signal conditioning, and optical engine products.
Warrants let holders lock in a purchase price for shares down the road. Exercising a warrant can dilute current shareholders. With a “cashless” exercise, holders don’t pay in cash—they use share value to claim the stock.
CFO Mike Tate told the earnings call that as the warrants vest, their accounting “runs directly against revenue” and “directly against gross margins.” He added, “We are kind of modeling a non-cash hit to gross margins of about two points a quarter” beginning in the second quarter—meaning two percentage points, or 200 basis points, since 100 basis points is one percentage point. 1
Astera posted fourth-quarter revenue of $270.6 million, a jump of 92% year over year, with adjusted earnings landing at 58 cents a share. For the March quarter, the company put out guidance of $286 million to $297 million in revenue and adjusted profit between 53 and 54 cents per share. CEO Jitendra Mohan noted an “accelerating R&D investment”—highlighting a new design center launch in Israel. 2
Analysts were looking for 52 cents per share and quarterly revenue of $249.6 million, according to FactSet forecasts reported by Investor’s Business Daily. The report added that the company’s outlook for the March quarter topped those same projections. 3
Tate told the company on Feb. 4 he plans to step down as CFO on March 2, according to a separate SEC filing. He’ll remain in a strategic advisor role to the CEO until Sept. 1. Lynch’s base salary is set at $500,000, the filing noted, along with details on equity awards connected to his new position.
Supplying a hyperscale data center is “a double-edged sword,” TD Cowen’s Sean O’Loughlin said, noting Amazon’s deal could open up “significant revenue opportunity and revenue concentration” for the supplier. O’Loughlin also highlighted switching competition from Broadcom and Marvell. 4
Bank of America bumped up its price target for Astera Labs to $200 from $185 but left its Neutral rating unchanged, according to TipRanks via TheFly. In the report, analysts pointed to a gross margin headwind of about 200 basis points linked to the Amazon warrant. The note also made it clear: Credo Technology remains BofA’s preferred pick among the group. 5
The numbers just don’t budge. Those warrants kick in solely if Amazon’s spending crosses the set milestones — and the accounting impact Tate flagged might show up as Astera leans into heavier operating costs and puts more hardware-driven products out there.
Focus shifts to new info on Amazon’s buying pace and the timeline for warrant-driven margin pressure as Astera heads into the June quarter. March 2 is the date to watch—Lynch steps in as finance chief then.
