Exploring Rambus’s Expansion: An Investor’s Perspective Exploring Rambus’s Expansion: An Investor’s Perspective

Written By Michael Gary Scott

Rambus RMBS shares have taken a nosedive of 42% year to date (YTD) in comparison to the flourishing Zacks Electronics – Semiconductors industry, which has surged by 13.6%. RMBS stock has, unfortunately, fallen behind the Zacks Computer and Technology Sector and the S&P 500, showing growth of only 14.6% and 15%, respectively, in the YTD period.

The stumble in Rambus stock began after its second-quarter 2024 results missed analysts’ estimates, leading to a significant decline in revenues and GAAP earnings per share. This stumble has prompted investors to question the viability of holding onto or selling RMBS stock.

Despite recent setbacks, Rambus maintains its stronghold in the fabless chip design sector.

Rambus is making strides with the expansion of its portfolio through inventive product launches. Notably, the company recently introduced the very first High Bandwidth Memory (HBM)-4 Memory Controller Intellectual Property (IP) chip in the market.

The HBM-4 IP is geared to cater to the substantial memory bandwidth requirements of high-performance computing and artificial intelligence graphics processing units. With its high-density memory, the HBM-4 is set to support the extensive computational workloads effectively.

Harnessing Innovation: Rambus YTD Performance

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The HBM-4 adheres to the JEDEC Spec of 6.4 Gigabits per second and can handle computation up to 10 Gbps, providing a throughput of 2.56 Terabytes per second. Moreover, the remarkable versatility of the HBM-4 IP lies in its compatibility with third-party or customer PHY solutions.

Throughout this year, RMBS has unveiled its DDR5 Client Clock Driver (CKD) for public consumption, profiting from the industry’s shift from DDR4 to DDR5 CKD. Additionally, RMBS introduced DDR5 server Power Management ICs in 2024, which are garnering attention among its data center clientele.

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The Dominance Persists: Rambus in the Chip Design Arena

Rambus is a pioneering chip design company that licenses its industry-leading patents to various companies. Giants in the industry like Advanced Micro Devices AMD, NVIDIA NVDA, Broadcom, Cisco CSCO, IBM, Marvell, MediaTek, Micron, Qualcomm, and STMicroelectronics extensively utilize Rambus’ patented technologies and solutions.

Rambus has been in collaboration with AMD since the mid-2000s, signing the first Patent License Agreement. This pact enabled AMD to integrate Rambus’ patented technologies into numerous products, including those employing DDR2, DDR3, FB-DIMM, PCI Express, and XDR controllers. NVIDIA has been leveraging Rambus technology for over a decade. For ten years, RMBS and Cisco have partnered, with CSCO integrating Rambus’ security technologies into its products.

Final Thoughts: A Perspective For Investors

Rambus’s broadened product portfolio and substantial customer base render the stock an appealing investment option currently. At present, RMBS holds a Zacks Rank #1 (Strong Buy). You can explore the complete list of today’s Zacks #1 Rank stocks here.

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