Why Astera Labs' Rally May Be Riskier Than It Appears

Author: Shivank Goswami | September 11, 2025 09:15am

Astera Labs (NASDAQ:ALAB) has been on a phenomenal run over the past few months, drawing attention from traders and investors alike. But when analyzed under the Adhishthana Principles, the rally raises some red flags. The stock is currently in it's first leg of Phase 2 of its 18-phase cycle on the weekly chart, a stage where such sharp moves often don't sustain. Here's why caution is warranted.

Is Astera Labs Rallying in the Wrong Phase?

According to the Adhishthana framework, Phase 2 is split into two distinct periods:

• Sankhya Period: typically marked by consolidations, slumps, or sideways moves.

• Buddhi Period: known for decisive, large-scale breakouts that often set the tone for future rallies.

For a better understanding of Phase 2 and how it typically plays out, see our Carvana analysis, which outlines a textbook Phase 2 structure.

Astera Labs, however, is rallying aggressively during its Sankhya period, a stage that usually lacks bullish strength. This kind of misalignment often signals instability beneath the surface and, historically, such premature rallies tend to get punished once the Buddhi period begins.

We've seen this play out before. e.l.f. Beauty, for example, surged during its Sankhya period only to face sharp corrections as soon as it transitioned into Buddhi. Astera Labs appears to be setting up for a similar risk profile.

Investor Outlook

While Astera Labs's momentum might carry forward in the short term, the cycle structure points toward turbulence ahead, specifically when the Buddhi period kicks in around October 2025. That's the window where the market often realigns with the principles, and premature rallies tend to face resistance.

For existing investors, this doesn't necessarily mean exiting immediately. But hedging strategies, such as options overlays, can help manage downside risk. As for new investors, chasing this rally may prove costly. Our stance remains cautious, and we recommend waiting for clearer alignment with the cycle before taking fresh positions.

Also Read: MP Materials Stock Is Rallying, But I'm Not Buying – Here's Why

Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga's reporting and has not been edited for content or accuracy.

Posted In: ALAB