RMBS fell 28% from its June peak but holds a BUY rating, with a $108.43 base target and bull case reaching $173.
Astera Labs trades at a P/E of 283 versus Rambus's forward P/E of 24, while Marvell's hyperscaler demand signals a tailwind for RMBS royalties.
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Our Rambus (NASDAQ:RMBS) call is constructive. After a violent June rally and sharp July pullback, the memory interface specialist trades in the shadow of its own overshoot. The 24/7 Wall St. price target for Rambus is $108.43 over the next 12 months, implying 5.38% upside from $102.89. Our recommendation is buy with high confidence at 0.9.
Shares are down 6.16% over the past week and 28.19% over the last month after peaking near $143.29 on June 15. Even after that reset, RMBS is up 11.97% year to date and 59.45% over the past 12 months, trading 17% below the 52-week high of $174.10.
Fundamentals are strong. Q1 FY26 revenue hit $180.19 million, up 8.12% year over year, with product revenue climbing 15%. Non-GAAP EPS came in at $0.63, narrowly missing the $0.6363 consensus.
FY25 closed at $707.63 million in revenue, up 27.13%, and $360 million in operating cash flow. CEO Luc Seraphin flagged that "the growth of AI inference and agentic workloads in the data center continues to drive demand for higher memory bandwidth."
Our bull-case scenario points to $173.05 within 12 months, implying 68.19% upside. Analyst consensus sits at $144.57, with 7 buys, 2 holds, and zero sells. Drivers:
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DDR5 Registered Clock Driver leadership, HBM4E memory controller IP marketed as the industry's fastest, and LPDDR5X SOCAMM2 chipset for next-generation AI servers. Q2 FY26 guidance calls for product revenue of $95 to $101 million, extending the Q4 FY25 record.
The bear case targets $92.86, or -9.75% from here. Royalty revenue slipped to $69.64 million from $74 million a year ago. An analyst downgrade cited tightening DRAM supply. Non-GAAP operating margin compressed to 42% from 46% as R&D climbed 18%.
Insiders including the COO and multiple directors sold shares between $125.52 and $170.15 in May and June. Bulls counter that R&D spend of $50.23 million funds HBM4E and SOCAMM2 designs that should compound into product revenue for years.
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