Rambus RMBS shares have witnessed a sharp decline of 42% year to date (YTD) compared to the growth of 13.6% in the Zacks Electronics – Semiconductors industry. This underperformance against the Zacks Computer and Technology Sector and S&P 500, which recorded growth figures of 14.6% and 15% respectively, has created a buzz among market watchers.
Following its weak second-quarter 2024 results, Rambus experienced a notable dip as its revenues fell below analyst estimates, instigating caution among investors. Consequently, the prevalent question arises – should investors buy or sell RMBS stock at this juncture?
Despite recent setbacks, Rambus remains a dominant player in the fabless chip design space.
The company has been actively broadening its portfolio through the introduction of innovative products. Notably, Rambus unveiled the industry’s pioneering High Bandwidth Memory (HBM)-4 Memory Controller Intellectual Property (IP) chip.
Designed to meet the substantial memory bandwidth requirements of high-performance computing and artificial intelligence graphics processing units, the HBM-4 IP stands poised to support the massive computational workloads with its high-density memory capabilities.
Rambus’ Noteworthy Performance in 2024
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The HBM-4 chip complies with JEDEC Spec of 6.4 Gigabits per second and can manage computations up to 10 Gbps, delivering a throughput of 2.56 Terabytes per second. Furthermore, the HBM-4 IP showcases compatibility with third-party or customer PHY solutions, enhancing its versatility.
In the current financial year, RMBS has made its DDR5 Client Clock Driver (CKD) accessible to the public and is reaping benefits from the industry shift towards DDR5 CKD from DDR4. Moreover, the company rolled out DDR5 server Power Management ICs in 2024, which are garnering attention from its data center clientele.
Rambus’ Ongoing Leadership in Chip Design
Rambus stands as a trailblazer in chip design, providing licenses of its cutting-edge products to various companies. Industry giants like Advanced Micro Devices, NVIDIA, Broadcom, Cisco, IBM, Marvell, MediaTek, Micron, Qualcomm, and STMicroelectronics leverage Rambus’ patented technologies and solutions.
The collaboration between Rambus and AMD traces back to the mid-2000s when the two firms signed their first Patent License Agreement. This pact allowed AMD to incorporate Rambus patented technologies across multiple products, including those leveraging DDR2, DDR3, FB-DIMM, PCI Express, and XDR controllers. NVIDIA has been integrating Rambus technology for over a decade now, while Cisco has been utilizing Rambus’ security technologies in its products through a decade-long partnership.
Final Thoughts
The expansion of Rambus’ product portfolio coupled with its strong customer base positions the stock as an attractive buy opportunity. Currently, RMBS holds a Zacks Rank #1 (Strong Buy). Click here for the complete list of today’s Zacks #1 Rank stocks.
