Rambus to Buy AnalogX; Shares Rally 8.2%

Rambus Inc. (RMBS) recently announced the acquisition of AnalogX, one of the foremost providers of low power multi-standard connectivity SerDes IP solutions. The terms of the deal, which is likely to close in the third quarter of 2021, were not disclosed.

Following the news release, shares of the chips and silicon IP provider rallied 8.2% in Wednesday’s trading session. It then pared gains modestly in the extended trading session to close at $21.70.

Rambus believes that the acquisition will be value-accretive in 2022 and will strengthen its PCIe 5.0 and 32G Multi-protocol PHYs offerings.

Luc Seraphin, CEO of Rambus said, “As data centers move to a disaggregated model, high-speed connectivity will be instrumental to unleashing the performance of data-intensive computing platforms. The industry-leading PHYs and DSP design expertise from AnalogX will feed our roadmap for data center interconnect chips and expand our reach to new applications across data center, AI/ML and 5G.” (See Rambus stock chart on TipRanks)

On May 10, Citigroup analyst Atif Malik reiterated a Buy rating on the stock with a price target of $23, which was lowered from $24 (4.8% upside potential).

According to Malik, the company’s strong patent offerings of interface and security IP along with a heightened focus on its semiconductors can act as tailwinds for the company. The stock has a Moderate Buy consensus rating based on 2 Buys. The average analyst Rambus price target of $24.5 implies 11.67% upside potential from current levels. Shares have gained 42.8% over the past year.

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