Astera Labs Stock Plummets Amid Broad Market Valuation Concerns

Astera Labs (ALAB) shares tumbled 19.3% this week as Federal Reserve Chair Jerome Powell's valuation warnings triggered a sector-wide selloff. The AI hardware stock's decline outpaced modest dips in the S&P 500 (-0.3%) and Nasdaq Composite (-0.7%), reflecting heightened sensitivity among growth equities to macroeconomic sentiment.

Powell's Rhode Island remarks highlighted stretched equity valuations despite impending rate cuts, a paradox that rattled investors. "Markets are pricing perfection," observed one trader, as speculative positions unwound across tech sectors. Astera's 49% year-to-date gain offered little protection against the sudden risk-off shift.

The selloff occurred without company-specific news, underscoring how macro factors dominate crypto-adjacent tech stocks. AI-related assets face particular scrutiny as investors reassess growth trajectories in a higher-for-longer rate environment.