Rambus Inc. (RMBS): A Bull Case Theory
We came across a bullish thesis on Rambus Inc. on Business Invest’s Substack by Francesco Ferrari. In this article, we will summarize the bulls’ thesis on RMBS. Rambus Inc.'s share was trading at $69.68 as of August 20th. RMBS’s trailing P/E was 33.02 according to Yahoo Finance.
Photo by Yogesh Phuyal on Unsplash
Rambus operates as a niche player in the semiconductor industry, focusing on memory and security technologies. The company primarily generates revenue by licensing its designs to major chipmakers, while also offering hardware solutions for data centers, automotive systems, and consumer electronics. Despite its technological relevance, Rambus remains relatively underappreciated by the market, reflecting limited visibility compared with larger peers.
The company’s recent three-year revenue compound annual growth rate (CAGR) has been 18%, falling short of the desired 30.7% CAGR investors would like to see to justify a higher valuation. At the current stock price of $41.67, approximately 40% below recent highs, the market appears to be pricing in continued revenue underperformance, signaling that significant upside remains contingent on accelerated growth. If Rambus can achieve closer to its targeted revenue trajectory while maintaining its licensing and hardware strategy, its valuation could become more attractive, bridging the gap between market expectations and the company’s growth potential.
For long-term investors, this creates a potential entry point, as the company’s intellectual property portfolio and hardware solutions serve high-demand, expanding markets in data centers, automotive, and consumer electronics. While near-term growth may remain constrained, Rambus’ combination of licensing revenues, strategic partnerships, and exposure to multiple end markets positions it for a possible rerating once growth accelerates toward desired levels. Overall, the company presents a cautiously compelling investment opportunity for those willing to wait for execution on its growth targets, with meaningful upside potential if it can restore investor confidence and close the gap between actual and desired performance.
Previously we covered a bullish thesis on Credo Technology Group Holding Ltd (CRDO) by Deep Value Returns in May 2025, which highlighted the company’s strong AI tailwinds, resilient growth, and strategic upside despite high valuation. The stock has appreciated approximately 66.52% since our coverage. Francesco Ferrari shares a similar focus on semiconductor businesses but emphasizes Rambus’ underappreciated memory and security technologies and growth potential.
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