It's the hottest chip stock you've probably never heard of - and it just soared 30% in a week

By Britney Nguyen

Rambus is a memory-chip company exposed to AI and data centers, and an analyst sees its semiconductor revenue growing 40% this year

Rambus' stock has climbed almost 30% in the past week.

The role of memory-chip makers in the artificial-intelligence boom is getting more investor appreciation, highlighting stocks that aren't typically part of mainstream conversations.

Rosenblatt analyst Kevin Cassidy just highlighted the recent momentum in shares of Rambus Inc. (RMBS), which have climbed almost 30% over the past week, as Wall Street has come around to the importance of dynamic random-access memory and Rambus's leadership in that market.

See more: Micron's stock is heading for its best winning streak since 2019. Here's why.

Rambus designs high-performance semiconductors and other products, including interface chips for transferring data between memory components and processors such as graphics processing units. Its products are also used in security solutions and automobiles.

Cassidy said he and his team anticipated that Rambus's stock would climb even more as Wall Street got more clarity on an accounting matter, which ended up playing out. But even with the recent rally, the analysts still see plenty of room to run for the stock. They lifted their price target to $130 from $90 in a Wednesday note, with the new target 34% above Tuesday's close.

In the analysts' view, "Rambus remains a pure-play leader in data center DRAM." They noted the company's large portfolio of memory components, such as graphics double data rate, or GDDR, a type of high-performance memory that can transfer large amounts of data fast for gaming, AI and other intense tasks.

Based on recent announcements about data center deployments, the analysts said demand for Rambus's products should last through 2026 and 2027. The analysts said they expect Rambus's semiconductor revenue to grow 40% year over year in 2025. The business is expected to grow 20% in 2026, the analysts said, on "increasing dollar content per server" and more servers being shipped.

Cassidy said that Rosenblatt's long-term investment thesis for Rambus has been around how DRAM is becoming increasingly crucial to AI deployment. He said that the thesis "is playing out above our expectations."

The analysts noted that new licensing agreements helped with aligning certain industry rules on revenue recognition. The matter previously "had been an overhang on the stock's valuation," Cassidy said.

-Britney Nguyen

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

09-17-25 1046ET