Analysts at Evercore ISI have increased the price target for Rambus (NASDAQ:RMBS) to $172 from $119 while maintaining an Outperform rating. This adjustment reflects strong growth expectations in the memory chip sector driven by AI demand.
Upward Revenue Forecasts
Revenue projections for Rambus now stand at $5.76 billion for 2027 and $9.06 billion for 2028. These figures mark significant increases from prior estimates of $3.73 billion and $4.50 billion, respectively. The new $172 target equates to 23 times the projected 2028 revenue.
Valuation and Growth Potential
Rambus currently trades at a price-to-earnings ratio of 67.84 times. Data suggests this multiple remains reasonable given the company’s position among high-growth memory firms.
AI and CPU Demand Fuel Outlook
Sustained demand for Agentic AI and CPU-related technologies supports Rambus’s RCD chip shipments. Rising attach rates for top-tier CPU SKUs boost expectations for companion chip sales. First-quarter 2026 revenue anticipates a 32% jump over full-year 2025 levels, with further sales acceleration in the second half.
Rambus advances LPDDR6 SOCAMM modules alongside RDIMM chipsets in collaboration with content providers, unlocking new revenue streams.
Strong Recent Momentum
Over the past 12 months, Rambus shares have surged 80.56 percent, accompanied by 27 percent revenue growth quarter-over-quarter, underscoring robust fundamentals.
Q1 2026 Results Mixed
In the first quarter of 2026, Rambus reported earnings per share of $0.63, slightly below the $0.64 consensus estimate. Revenue reached $189.71 million, surpassing the $180 million forecast. Despite the revenue beat, the results disappointed some investors.
Baird Downgrade Adds Caution
Baird shifted its rating on Rambus to Neutral from Outperform and set a $120 price target. The firm cites anticipated DRAM oversupply through 2027 and softening RDIMM sales as key concerns. This move has sparked backlash from the investment community.
Market participants weigh these developments closely, with analysts monitoring potential impacts on upcoming performance.
