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Investing.com - Susquehanna raised its price target on Rambus Inc . (NASDAQ:RMBS) to $75.00 from $70.00 on Tuesday, while maintaining a Positive rating on the semiconductor company. The company, currently valued at $6.9 billion, maintains a "GREAT" financial health score according to InvestingPro analysis.
Rambus reported first-quarter revenue of $170 million and earnings per share of $0.60, exceeding expectations of $167 million and $0.58, respectively. The outperformance was driven by product revenue, including incremental revenues from companion chips, and Silicon IP. The company maintains impressive gross profit margins of 81.92% and has achieved robust revenue growth of 30.13% over the last twelve months.
The company’s Silicon IP revenue grew over 30% quarter-over-quarter, supported by easier comparisons and rising demand for HBM4 and PCIe7 technologies. Management guided for second-quarter earnings per share of $0.63, slightly above Susquehanna’s expectation and in line with consensus. InvestingPro analysis reveals 12 additional key insights about Rambus’s performance and potential, available to subscribers.
Rambus continues to gain market share in DDR5 RCDs, now capturing over 40% of the market. Companion chip contribution is increasing and is expected to account for high single-digit percentage of product revenue in the second half of 2025, up from low single-digit in the first half.
Susquehanna noted potential headwinds from traditional server build pull-ins from the second half into the first half of 2025, which could impact RCD revenue growth later this year. However, the transition from Gen2 to Gen3 DDR5 RCD could drive double-digit growth due to higher pricing.
In other recent news, Rambus Inc. reported its second-quarter 2025 earnings, which showed a mixed financial performance. The company missed earnings per share (EPS) expectations, posting an EPS of $0.53 compared to the forecast of $0.58. However, Rambus exceeded revenue expectations, reporting $172.2 million against the anticipated $166.97 million. Despite the EPS miss, the company’s stock rose, driven by strong revenue figures and optimistic forward guidance. In addition, Rosenblatt raised its price target for Rambus from $80 to $90, maintaining a Buy rating on the stock. The firm highlighted Rambus’s strong quarterly performance and its role as a significant player in enhancing AI system performance. These developments reflect the company’s ongoing strategic efforts and market position.
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