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An under-the-radar chipmaker could yield more than 21% upside as the company takes a broader share of the market, according to Jefferies. The firm upgraded Rambus on Thursday to buy from hold, and raised its price target to $65 per share from $45. Rambus stock closed at $53.55 on Wednesday, and shares have gained a staggering 64% from the start of the year. In Jefferies’ bull case, the stock could jump by about 50%, but it could fall about 32% in the firm’s bear scenario. Jefferies analyst Mark Lipacis thinks that Rambus’ stock could benefit from the company’s ability to grow its presence in different segments of the semiconductor market, including Double Data Rate 5 (DDR5) through application in registered clock driver (RCD) chips. In particular, DDR5 can help reduce the amount of power a given computer uses. Lipacis thinks that the DDR5 segment of Rambus’ business could drive revenue over the next four years by 15%. RMBS YTD mountain Rambus stock. “RMBS’ heritage in foundational memory interface technology and execution in expanding to adjacent opportunities puts it in a strong but still underappreciated position to capture leading market share in DDR5 buffer chipsets inflecting in 2H23 and a meaningful share in the [Compute Express Link] chipset market to ramp in 2025,” Lipacis said. The analyst added that the company expanding into more corners of chip technology could add meaningfully to the Rambus’ earnings per share, which he predicts will reach an annual EPS of $3.30 or more in 2026. — CNBC’s Michael Bloom contributed to this report.
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