Highflying semiconductor stock Rambus could see its market value double in the next several years, a Wall Street analyst said Friday. Alternatively, RMBS stock could be an acquisition target, he said.
CFRA Research analyst Keven Young reiterated his strong buy rating on RMBS stock. He also raised his price target to 65 from 53.
"We still see potential for RMBS to double from (its) $6.4 billion market cap over the next several years or to be acquired at a large premium," Young said in a note to clients.
On the stock market today, RMBS stock rose 1.3% to close at 59.47.
RMBS Stock A Recent Breakout
On Tuesday, RMBS stock broke out of a six-week consolidation pattern at a buy point of 51.98, according to IBD MarketSmith charts. The move higher occurred after Rambus delivered better-than-expected first-quarter results with a mixed outlook on May 1.
Year to date, Rambus is up more than 66%. That compares with a 9.2% gain for the S&P 500 index.
CFRA's Young sees Rambus' total addressable market doubling through 2024 thanks to data-center opportunities.
Rambus Tech Used In Artificial Intelligence
Rambus has a leadership position in technologies necessary for processing artificial intelligence workloads, Rosenblatt Securities analyst Kevin Cassidy said in a recent note to clients. He rates RMBS stock as buy with a price target of 60.
Rambus makes memory interface chips, including DDR5 and CXL devices. Its high-performance memory subsystems alleviate the bottleneck between memory and processing for data-intensive systems.
On Thursday, Jefferies analyst Mark Lipacis upgraded RMBS stock to buy from hold. He also raised his price target on Rambus to 65 from 45.
"Rambus is well positioned for not only leading buffer chip share in ramping DDR5 but also for meaningful share in the significant adjacent growth opportunities of companion chips and CXL," Lipacis said in a note to clients.
RMBS stock is on the IBD Tech Leaders list. Rambus has a best-possible IBD Composite Rating of 99. The Composite Rating scores a stock's key growth metrics against all other stocks regardless of industry group.
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