Ed Lin

Intel more than halved its stake in artificial-intelligence firm Astera Labs during the third quarter, missing out on a rally that has nearly doubled the stock price since Sept. 30.

At the end of March, Intel owned six million shares of Astera, which makes semiconductor-based connectivity products used to build cloud and AI infrastructure. Astera went public that same month.

The stock had been priced at $30 each on March 19 for Astera's initial public offering, which was well-received. On March 28, the last trading day of the month, Astera shares closed at $74.19, and Intel's stake was valued at $448 million.

Astera shares slipped over the next several months. They ended at $60.51 on June 28, the last trading day of the second quarter. Intel's stake of 5.9 million Astera shares at that point were valued at $357 million.

By Sept. 30, Astera stock closed at $52.39. Intel had sold 3.3 million shares during the third quarter, and its remaining 2.6 million were then valued at $135 million.

In early October, the stock surged on an announcement of fabric switches to help manage data flow in computing systems and are designed for AI applications and cloud infrastructure. The news release of the launch included an approving quote from AI chip maker Nvidia, but nothing from Intel.

Shares jumped nearly 38% on Nov. 5 on Astera's strong third-quarter earnings and upbeat guidance, and went on to set a record high of $100.09 on Nov. 11. The stock was at $92.85 in Wednesday midday trading, up 77% from Sept. 30. The 3.3 million shares Intel sold in the third quarter have a paper gain of $135 million since that period ended.

Intel didn't immediately respond to a request for comment.

The potential good news is that if Intel still owns the 2.6 million shares it held at the end of September, they're now worth $239 million, a gain of $104 million in a month and a half.

Intel's Intel Capital unit said on its site that its relationship with Astera goes back to 2018, and calls it "[o]ne of our most remarkable partnerships."

Intel may have gleaned its stake of six million Astera shares in March from the conversion of pre-IPO shares from an Intel Capital investment.

"Intel's venture capital arm, Intel Capital, regularly assesses its investment portfolio and reallocates assets to meet its objectives," Intel told Barron's. "As a matter of policy, we do not comment on specific transactions."

Astera's regulatory filings for its IPO didn't mention an Intel Capital investment, but the company wasn't obligated to disclose investments of less than a 5% stake. Intel wasn't required to disclose an investment in Astera before the company went public.

Inside Scoop is a regular Barron's feature covering stock transactions by corporate executives and board members -- so-called insiders -- as well as large shareholders, politicians, and other prominent figures. Due to their insider status, these investors are required to disclose stock trades with the Securities and Exchange Commission or other regulatory groups.

Write to Ed Lin at edward.lin@barrons.com and follow @BarronsEdLin.

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November 13, 2024 12:08 ET (17:08 GMT)

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