Key Takeaways
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Whale Rock Capital, a hedge fund firm managing nearly $13 billion, sold all its Astera Labs, Carvana and Western Digital stock in the third quarter while building up Meta and SiTime.
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Astera Labs and Western Digital are each down 54% since June 30, the last date the fund reported owning them, while Carvana is up 10%.
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Analysts’ average targets sit 55% above Astera Labs’ price and 107% above Western Digital’s, but just 13% above Carvana’s.
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Astera Labs looks like the sale most worth second-guessing, and Carvana the one to leave sold.
A $13 billion hedge fund just cleaned out three stocks, and two of them have fallen by more than half since it last reported owning them.
Whale Rock Capital’s 13F for the quarter ended Sept. 30, filed Nov. 13, shows no shares left of Astera Labs (ALAB:NASDAQ), Carvana (CVNA:NYSE) or Western Digital (WDC:NASDAQ). Meanwhile, it more than doubled its Meta Platforms (META:NASDAQ) stake, now its largest at 7.6% of its 13F stocks, and added a third to SiTime (SITM:NASDAQ).
A 13F doesn’t say when in the quarter a fund sold, what it got, or why. But it does flag three stocks worth a second look.
Astera Labs’ growth hasn’t gone anywhere
Astera Labs was Whale Rock’s biggest exit: 1.57 million shares on June 30, worth $757 million, or 6.1% of its 13F stocks then. The stock is down 54% since, even though the business is still growing fast. Third-quarter revenue rose 154% to $584.9 million, and management guided the fourth quarter well above what analysts expected, at $730 million to $750 million. The worry is breadth: Scorpio X switches shipped to just two customers in the quarter, and CFO Desmond Lynch said on the call that “the initial Scorpio X platforms have completed much of their initial deployment ramps.” Management expects new customers to get only pre-production shipments this quarter.
TIKR tracks 25 analysts on Astera Labs. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Astera Labs, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Astera Labs’ Analyst Ratings
Carvana kept climbing
Carvana went the other way. Whale Rock held 4.27 million shares on June 30, worth $281 million, or 2.3% of its 13F stocks, and the stock is up 10% since.
Sales are booming. Carvana sold a record 217,385 retail cars in the third quarter, up 39%, and now expects full-year adjusted EBITDA at the higher end of $2.7 billion to $3.0 billion. But profit per car keeps slipping: adjusted EBITDA per car fell to about $3,680 from $4,085 a year earlier, its fourth straight year-over-year decline. Not every fund agrees with Whale Rock here: 16 big funds bought Carvana.