Why Vicor Stock Was Crushing it This Week
Key Points
It nearly doubled its estimate for sequential revenue growth.
This is due to royalties derived from a non-exclusive license.
Power components and systems specialist Vicor's (NASDAQ: VICR) stock was loaded with energy over the past few trading days. According to data compiled by S&P Global Market Intelligence, the company's equity was up by almost 24% week to date, as of Friday morning before market open. A guidance revision played a major role in the share price improvement.
Doubling down
On Monday, Vicor announced that it was lifting its forecast for third-quarter revenue growth. The company's top line is now anticipated to expand by over 20% sequentially during the period, well above the previous guidance of almost 10%.
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Vicor added that this is due to royalties from a non-exclusive license the company granted for its vertical power delivery (VPD) technology. It did not specify the amount involved. The company said that four "leading" businesses have secured such licenses.
None of these counterparties were identified, but they were described as being original equipment manufacturers (OEMs) and hyperscalers.
A stock with impressive power
As a supplier of equipment used in artificial intelligence (AI) deployments, Vicor is in the midst of a frenzied build-out of the hot technology of our age. The company's recent performance reflects this; it posted impressive year-over-year growth in both its first and second quarters of this year while convincingly beating analyst estimates.
That raised guidance should give all Vicor investors a shot of confidence that the company is continuing to speed down the right track -- particularly given that its growth is boosted by extremely high-margin licensing royalty revenue. The stock looks very much like a buy these days.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.