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Rambus gains on Wells Fargo comments

Published 21/12/2023, 21:28
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RMBS
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In a recent report, Wells Fargo cast a favorable light on Rambus (NASDAQ:RMBS), following encouraging developments from Micron Technology (NASDAQ:MU). As a result, Rambus shares surged more than 6% intra-day today.

The focus was on RMBS's potential gains from MU's shift to high-volume DDR5 server DIMM shipments and a projected rise in data center revenue in Q1/24.

Wells Fargo noted that MU's positive trajectory in DDR5 server DIMM shipments is a particularly good sign for RMBS. This trend is expected to lead to a robust quarter-over-quarter ramp-up in RMBS's DDR5 chipset sales into 2024. Additionally, MU's anticipation of DDR5 units surpassing DDR4 in the first half of 2024 could signal an Average Selling Price (ASP) increase and a larger market share for RMBS's chipsets.

The pace of DDR4 inventory drawdowns is also highlighted as a crucial factor for RMBS's near-term performance. With expectations of revenue normalization in DDR4 and continued growth in DDR5 sales, analysts suggest a favorable outlook for RMBS.

Wells Fargo reiterated its Overweight rating and $70 price target on Rambus shares.

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