Semiconductor Stock Rambus Could Be An Acquisition Target: Analyst
A Wall Street analyst predicted Friday that the market value of Rambus (RMBS), a high-flying semiconductor company, could double over the next few years. He said that RMBS could also be a target for acquisition.
He raised his price goal to 65 from 52.
Young wrote in a client note that he still saw the potential for RMBS's market cap to double over the next few years from its current $6.4 billion.
RMBS shares rose by 1.3% today to close at 59.47.
RMBS Stock: A Recent Breakout
According to IBD MarketSmith charts, RMBS broke out of a consolidation pattern of six weeks on Tuesday at a buying point of 51.98. Rambus's first-quarter results were better than expected, with a mixed outlook. This was announced on May 1, and the stock moved higher.
Rambus has gained more than 66% in the last year. This compares to a 9.2% increase for the S&P 500.
Young, CFRA's Young, believes that Rambus' total market addressable will double by 2024 due to the data-center opportunity.
Rambus Technology Used in Artificial Intelligence
Kevin Cassidy, an analyst at Rosenblatt Securities, said that Rambus is a leader in the technologies needed to process artificial intelligence workloads. He rates RMBS as a buy, with a 60-cent price target.
Rambus manufactures memory interface chips including DDR5 devices and CXL devices. Rambus' high-performance memory systems reduce the bottleneck that exists between data-intensive system processing and memory.
Mark Lipacis, an analyst at Jefferies, upgraded RMBS to Buy from Hold on Thursday. Mark Lipacis also increased his price target for Rambus from 45 to 65.
Lipacis wrote in a client note that Rambus was well-positioned to not only lead the buffer chip market in DDR5 ramping but also capture a meaningful share of adjacent growth opportunities such as companion chips and CXL.
The RMBS stock appears on the IBD list of Tech Leaders. Rambus is rated 99 on the IBD Composite Rating, which is the highest possible rating. The Composite Rating compares a stock’s key growth metrics to all other stocks, regardless of industry.