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Rambus stock has declined significantly since its second-quarter 2024 results, wherein its revenues fell short of the analysts’ expectations. Moreover, a massive decline in GAAP earnings per share also turned investors cautious about its near-term prospects. This underperformance raises a crucial question for investors: Is it time to buy or sell RMBS stock?
While Rambus’ recent underperformance might suggest that the stock is out of favor with investors, the company maintains a dominant position in the fabless chip design space.
Rambus is rapidly expanding its portfolio with innovative product launches. Recently, the company launched the industry’s first High Bandwidth Memory (HBM)-4 Memory Controller Intellectual Property (IP) chip.
The HBM-4 IP is set to handle the large memory bandwidth demanded by high-performance computing and artificial intelligence graphics processing units. The HBM-4 will support the massive computational workload with its high-density memory.
Rambus YTD Performance
Image Source: Zacks Investment Research
The HBM-4 supports JEDEC Spec of 6.4 Gigabits per second and is capable of handling computation up to 10 Gbps, providing a throughput of 2.56 Terabytes per second. Moreover, the HBM-4 IP is compatible with third-party or customer PHY solutions adding to its versatility.
So far this year, RMBS has made its DDR5 Client Clock Driver (CKD) available to the public and is gaining from the industry’s transition from DDR4 to DDR5 CKD. RMBS also launched DDR5 server Power Management ICs in 2024, which is seeing traction among its data center customers.
Rambus Maintains Its Dominance in Chip Design
Rambus is an innovative chip-designing company that provides patents of its industry-leading products to other companies. Industry leaders like Advanced Micro Devices (AMD - Free Report) , NVIDIA (NVDA - Free Report) , Broadcom, Cisco (CSCO - Free Report) , IBM, Marvell, MediaTek, Micron, Qualcomm and STMicroelectronics use Rambus’ patented technologies and solutions.
Rambus and AMD signed the first Patent License Agreement in the mid-2000s. The initial agreement allowed AMD to use Rambus patented technologies in various products, including those used in DDR2, DDR3, FB-DIMM, PCI Express and XDR controllers. NVIDIA has been using Rambus technology for more than a decade now. RMBS and Cisco have been in collaboration for a decade with CSCO using Rambus’ security technologies in its products.
Conclusion
Rambus’ expansion of product portfolio and strong customer base make the stock worth buying at present. RMBS sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
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RMBS Expands Portfolio: Should Investors Buy or Hold the Stock?
Rambus (RMBS - Free Report) shares have plunged 42% year to date (YTD) against the Zacks Electronics - Semiconductors industry’s growth of 13.6%. RMBS stock also underperformed the Zacks Computer and Technology Sector and the S&P 500’s growth of 14.6% and 15%, respectively, in the YTD period.
Rambus stock has declined significantly since its second-quarter 2024 results, wherein its revenues fell short of the analysts’ expectations. Moreover, a massive decline in GAAP earnings per share also turned investors cautious about its near-term prospects. This underperformance raises a crucial question for investors: Is it time to buy or sell RMBS stock?
While Rambus’ recent underperformance might suggest that the stock is out of favor with investors, the company maintains a dominant position in the fabless chip design space.
Rambus is rapidly expanding its portfolio with innovative product launches. Recently, the company launched the industry’s first High Bandwidth Memory (HBM)-4 Memory Controller Intellectual Property (IP) chip.
The HBM-4 IP is set to handle the large memory bandwidth demanded by high-performance computing and artificial intelligence graphics processing units. The HBM-4 will support the massive computational workload with its high-density memory.
Rambus YTD Performance
Image Source: Zacks Investment Research
The HBM-4 supports JEDEC Spec of 6.4 Gigabits per second and is capable of handling computation up to 10 Gbps, providing a throughput of 2.56 Terabytes per second. Moreover, the HBM-4 IP is compatible with third-party or customer PHY solutions adding to its versatility.
So far this year, RMBS has made its DDR5 Client Clock Driver (CKD) available to the public and is gaining from the industry’s transition from DDR4 to DDR5 CKD. RMBS also launched DDR5 server Power Management ICs in 2024, which is seeing traction among its data center customers.
Rambus Maintains Its Dominance in Chip Design
Rambus is an innovative chip-designing company that provides patents of its industry-leading products to other companies. Industry leaders like Advanced Micro Devices (AMD - Free Report) , NVIDIA (NVDA - Free Report) , Broadcom, Cisco (CSCO - Free Report) , IBM, Marvell, MediaTek, Micron, Qualcomm and STMicroelectronics use Rambus’ patented technologies and solutions.
Rambus and AMD signed the first Patent License Agreement in the mid-2000s. The initial agreement allowed AMD to use Rambus patented technologies in various products, including those used in DDR2, DDR3, FB-DIMM, PCI Express and XDR controllers. NVIDIA has been using Rambus technology for more than a decade now. RMBS and Cisco have been in collaboration for a decade with CSCO using Rambus’ security technologies in its products.
Conclusion
Rambus’ expansion of product portfolio and strong customer base make the stock worth buying at present. RMBS sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.