Baird predicts Rambus can soar nearly 60% amid AI-driven demand

On November 26, 2024, Baird initiated coverage on semiconductor company Rambus, highlighting its significant potential within the chip industry heading into 2025. The analyst, Tristan Gerra, provided an outperform rating for the company's stock and established a price target of $90, indicating an expected increase of 58.3% from the stock's closing price the previous day. Rambus specializes in the manufacture of DDR memory interface chips and silicon IP solutions, which are integral to various applications such as data centers, automotive technology, and government functions. Gerra noted that Rambus's technology plays a crucial role in enhancing AI-driven performance in data centers. The company’s first-to-market solutions aim to alleviate performance bottlenecks between processing units and memory sources, making it a fundamental player in the evolving landscape of AI technologies and data processing. This strategic position is likely to attract significant interest from investors looking to capitalize on the tech industry's ongoing transformation. Furthermore, the analyst forecasted strong, secular revenue growth for Rambus due to increasing bandwidth requirements in chip technologies. According to Baird’s estimates, Rambus has a promising $1.35 billion opportunity in the data center chipset market. This projection underscores the company's importance in meeting the growing demands for faster and more efficient memory solutions as the reliance on data-driven applications accelerates. Overall, the assessment indicates that Rambus is positioned to become a core holding for those invested in the AI-enhancing memory technologies sector, aligning with the broader trends within the chip manufacturing and technology markets. As the need for high-performance chip solutions expands, Rambus stands to benefit from both immediate and long-term growth opportunities.