Quotes for the mid-cap company Rambus, which makes chips for AI data centers, jumped more than 8% in post-market trading yesterday, July 28. The driver was better-than-guided revenue for the second quarter.
Details
Shares of Rambus, which has a market capitalization of $6.9 billion, rose more than 8% to $69.50 apiece in after-hours trading yesterday. This morning, they are up almost another 9% as of this writing.
The gains have followed second-quarter earnings that beat the company's own forecasts. The top line increased more than 30% year over year to $172.2 million, about 1.3% above the middle of the guided range issued three months ago, noted the Investor's Business Daily.
Earnings review
The main contributor to the headline performance was product revenue, which increased 43% to $81.3 million. Rambus said this marked a record. The company provides high-performance memory interface chips for AI data centers, offers high-bandwidth IP solutions for advanced computing, and develops cryptographic algorithms designed to defend against quantum attacks. Rambus has three revenue streams: products, services, and licensing.
"With sustained leadership in DDR5 memory interface chips and growing traction for new products, we are well positioned to capitalize on the accelerating demand for high-performance computing and AI infrastructure," President and CEO Luc Seraphin was quoted as saying in the earnings release.
Rambus also reported record operating cash flow of $94.4 million.
For the third quarter, the company expects year-over-year revenue growth of 15% to $167 million at the low end of the guided range and about 28% to $185 million at the high end.
Stock performance
Year to date, Rambus is up almost 22%. It has nine "buy" ratings from Wall Street analysts versus only two "holds," according to MarketWatch. The average target price of $74.38 per share offers upside of nearly 16% to yesterday's close.
The AI translation of this story was reviewed by a human editor.
