Key Highlights

  • VICR shares are trading up 8.42% to $211.17, against a prior close of $194.77.
  • Q3 revenue was $197.1 million, up 78.5% year over year, with a 68.3% gross margin.
  • Backlog was $406 million, and management cited about $100 million of early Q4 bookings.
  • Vicor plans roughly 5x capacity expansion at two new Andover sites.
  • The average analyst target is near $390, but shares remain well below the 52-week high of $382.65.

AI Rally Extends Monday's 11% Jump

Vicor (NASDAQ:VICR) shares are trading up 8.42% to $211.17 as investors weigh blowout third-quarter results, driven by AI-linked vertical power delivery royalty revenue, and a planned five-fold capacity expansion with two new Andover sites. The rally extends Monday's roughly 11% jump as an AI-led semiconductor rally lifted tech sentiment after Anthropic's IPO filing.

Shares opened at $199.44 and traded between $198.58 and $211.75 on volume of about 612,320 shares. The stock rose 7.06% in the session after the report.

Vicor, founded in 1981 and headquartered in Andover, Massachusetts, designs, manufactures and markets modular power components and complete power systems. Its portfolio includes brick-format DC-DC converters, bus converters, regulators and front-end modules, built on patented technologies such as Factorized Power Architecture. It sells to OEMs, independent electronics manufacturers and contract manufacturers in high-growth markets including high-performance computing and AI, aerospace and defense, and industrial automation.

Q3 Revenue Rises 78.5% on a New Royalty Stream

Third-quarter revenue was $197.1 million, up 37.5% sequentially and 78.5% from a year earlier, beating the $187 million estimate. Royalty revenue was $66.6 million, up 119.1% sequentially, partly from initial payments from a new VPD licensee.

Gross margin was 68.3%, up 1,030 basis points sequentially, and net income was $63.3 million. Adjusted EPS of $1.33 missed the $1.39 estimate.

Backlog, Bookings and a Capacity Build Support the Outlook

Backlog was $406 million, with a book-to-bill above 1, and bookings were $100 million in the first two weeks of the fourth quarter, including a large second-generation VPD order from the lead customer. Fourth-quarter guidance calls for roughly a 10% sequential increase in total product revenue plus at least $43 million of royalty revenue.

Fab 1 is nearly at full utilization, so Vicor bought sites for Fab 2 and Fab 3 for roughly 5x or more capacity, with initial Fab 2 equipment deployment in the second quarter of 2027. Funding is expected to come from internal cash flow.

Rich Valuation, Legal Costs and Short Interest Temper the Move

Operating expenses rose 29.6% sequentially to $62.5 million, including $16.1 million of legal expense that is largely contingent on royalty revenue. Vicor has asked the ITC for a limited exclusion order against unlicensed infringing systems and is in talks with two hyperscalers after granting its first VPD license to a leading AI OEM.

The stock has a market cap of $9.74 billion and EPS of $2.99, and some commentators flag a rich valuation, insider selling and elevated short interest. Shares are well below the 52-week high of $382.65, while the average analyst target is near $390.