RMBS · Rambus
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a daily close above $106.67
Note written ·
How this view changed
- · Rating cut from Medium to Low. The note's kill line was crossed, 10 November 2026: The adjusted close of $80.76 on 10 November 2026 fell below the $87 kill line in the prior note, despite a Q3 beat and higher Q4 guide.
Price against the kill line
22.9% clear of its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close above $106.67, on record since 11 November 2026. The shares are down 18.3% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close above $106.67, just over the 200-day average of closes, which would show the shares leading the S&P 500. Fourth-quarter product revenue above the top of the $127–133 million guide would also point to the shares leading.
Research onlyNot in the portfolio.
Catalyst
Key figures from the filings · Technology
Quarter to 30 September 2026, filed 26 October 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 218
- Revenue, change on a year (%)
- +22.3
- Gross margin (%)
- 78.3
- Operating margin (%)
- 38.3
- Free cash flow, four quarters ($M)
- 313
- Price to earnings (×)
- 33.1
- Free-cash-flow yield (%)
- 3.6
All filed numbers
What Rambus reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| first filed | 218 | +22.3 | 78.3 | 38.3 |
| first filed | 207 | +20.4 | 79.8 | 35.1 |
| first filed | 180 | +8.1 | 79.7 | 34.3 |
| first filed | 190 | +18.1 | 78.9 | 37.2 |
| first filed | 179 | +22.7 | 79.5 | 35.4 |
| first filed | 172 | +30.3 | 79.8 | 36.6 |
| Pre-tax income ($M) | 90.5 |
| Net income ($M) four quarters: 266 | 74.6 |
| Diluted shares, change on a year (%) against the quarter to 30 September 2025 | −0.5 |
| Operating cash flow ($M) | 347 |
| Capital spending ($M) | 33.8 |
| Free cash flow ($M) | 313 |
| Cash and short-term investments ($M) | 777 |
| Debt ($M) | Not available |
| Net cash, cash less debt ($M) | Not available |
| Deferred revenue ($M) +36.8% on a year | 34.8 |
| Backlog, orders not yet delivered ($M) +79.5% on a year | 42.9 |
| Receivables ($M) | 142 |
| Inventory ($M) | 87.2 |
| Shareholders' equity ($M) | 1,418 |
| Market value ($M) | 8,807 |
| Enterprise value, market value plus net debt ($M) | Not available |
| Enterprise value to sales (×) | Not available |
| Enterprise value to operating income (×) | Not available |
| Price to earnings (×) | 33.1 |
| Price to book value (×) | 6.2 |
| Free-cash-flow yield (%) | 3.6 |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 4.0% of shares outstanding sold short, 2.9 days of average trading to cover, −10.4% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $1.1M |
| 12 monthsfrom | $0 | $20.0M |
The thesis
Rambus's server-memory chip business is growing, but the shares are more likely to lag the S&P 500 over the next three months. They closed at $84.97 on 12 November 2026, below the 50-day average of $92.62 and the 200-day average of $106.47. The 3-month price change is –15.7%. Nvidia's report on 17 November 2026 and Rambus's fourth-quarter results, expected around 26 January 2027, settle whether the growth outweighs the price weakness.
Rambus reported third-quarter revenue of $218.3 million on 26 October 2026, up 22% from a year earlier, against its own guide of $210–216 million. Product revenue was $114.3 million and royalty revenue was $77.0 million. The company guided fourth-quarter total revenue to $227–233 million and product revenue to $127–133 million.
The shares fell sharply after that report. They closed at a 52-week low of $69.68 on 5 November 2026, then recovered to $85.36 on 11 November 2026 and $84.97 on 12 November 2026. No company announcement or filing in the news record explains the drop on 5 November 2026. The recovery has not yet returned the shares to either moving average.
Bullish and bearish views on Rambus Inc.
The bull case on Rambus Inc. (RMBS), in brief: fourth-quarter guide steps up. The bear case: shares sold off after good reports.
Bull case
- Fourth-quarter guide steps up. Rambus guided total revenue of $227–233 million and product revenue of $127–133 million in its 26 October 2026 results release. Third-quarter product revenue of $114.3 million was a record.
- Earnings guide sits at the top of the third quarter. Non-GAAP (adjusted) earnings are guided at $0.84–0.92 per share for the fourth quarter, against $0.84 reported for the third. GAAP earnings are guided at $0.68–0.76 per share.
- Cash generation hit a record. Operating cash flow was $102.5 million in the third quarter, a company record, and cash and marketable securities were $776.9 million at 30 September 2026, per the results release.
- Buybacks continued. Rambus paid $135.4 million to repurchase stock in the third quarter, including the $100 million accelerated repurchase prepaid on 5 August 2026, per the same release.
- Memory demand is strong. Micron reported fiscal fourth-quarter revenue of $54.23 billion on 30 September 2026, against $11.32 billion a year earlier, and guided the next quarter to $61.5 billion. Rambus earns a fixed amount of chip content per server memory module, so its product revenue follows module units.
Bear case
- Shares sold off after good reports. Rambus fell about 23% after its first-quarter report on 28 April 2026, per pulse.bot, and about 9% after the July report. The 52-week closing low of $69.68 on 5 November 2026 came ten days after a third-quarter beat and higher guide.
- Royalties are guided lower. Fourth-quarter royalty revenue is guided to $68–74 million, below the $77.0 million reported for the third quarter. Royalties arrive in lumps tied to licence renewals, and the $84.2 million in the second quarter of 2026 remains the high.
- Inventory rose sharply. 24/7 Wall St. reported on 5 November 2026 that inventory rose to $74.8 million from $44.1 million. Management attributes the build to customers placing backlog orders earlier.
- Analyst targets sit far above the price. MarketBeat's price-target page lists an average target of $139.78 from 11 analysts on 11 November 2026, in a range of $90 to $172. Susquehanna kept a Neutral rating and raised its target to $103 on 27 October 2026.
- Insider filings show sales. Director Charles Kissner sold 5,000 shares at $111.00 on 2 October 2026 and 5,000 shares at $105.00 on 22 September 2026, both under Rule 10b5-1 trading plans, per SEC Form 4 filings. Both prices are above the last close.
Price setup
The last close was $84.97 on 12 November 2026. That is 51.2% below the 52-week high of $174.10, set intraday on 3 June 2026. The 3-month reference close was $100.85 on 14 August 2026.
Closes since the low: $69.68 on 5 November 2026, $74.53 on 6 November 2026, $80.74 on 9 November 2026, $80.76 on 10 November 2026, $85.36 on 11 November 2026 and $84.97 on 12 November 2026. The 50-day average of closes is $92.62 and sits above the last close. The 200-day average of $106.47 sits further above it.
A close back above the 50-day average would show the recovery from the November low extending. A close under $69.68 would set a new 52-week closing low. Rambus has no earnings date in the next 30 days.
Catalysts ahead
- 17 November 2026: Nvidia third-quarter fiscal 2027 results; conference call at 2 p.m. Pacific time. Reads AI server demand, which drives the module volumes behind Rambus product revenue. Nvidia guided the quarter to $108.0 billion, plus or minus 2%.
- ~17 December 2026 (est.): Micron fiscal first-quarter 2027 results. Tests Micron's $61.5 billion guide and the memory demand backdrop for Rambus module content.
- ~26 January 2027 (est.): Rambus fourth-quarter 2026 results and first-quarter 2027 outlook. Shows whether product revenue reaches the $127–133 million guide, whether royalties land in the $68–74 million range and whether module growth continues into 2027.
What would change the view
A daily close above $106.67, just over the 200-day average of closes, which would show the shares leading the S&P 500. Fourth-quarter product revenue above the top of the $127–133 million guide would also point to the shares leading.
What it trades with
Rambus trades with the AI-memory group: Micron, SK Hynix, Samsung and Astera Labs. A South Korean memory-sector selloff pulled the shares down about 11% in the session of 3 March 2026, per Trefis. Broad semiconductor moves have often moved the shares more than company news. Nvidia's report on 17 November 2026 and Micron's fiscal first-quarter report, expected around 17 December 2026, are the two peer readings that fall before Rambus reports.
The evidence, claim by claim (8)
- Third-quarter 2026 total revenue $218.3 million, up 22% from a year earlier, against a $210–216 million guide; product revenue $114.3 million, royalty revenue $77.0 million, contract and other revenue $27.0 million. Rambus Form 8-K, third-quarter 2026 results press release · as of
- Fourth-quarter 2026 guide: total revenue $227–233 million, product revenue $127–133 million, royalty revenue $68–74 million, non-GAAP earnings $0.84–0.92 per share. Rambus Form 8-K, third-quarter 2026 results press release · as of
- Operating cash flow of $102.5 million in the third quarter, a company record; cash and marketable securities $776.9 million; $135.4 million of stock repurchased in the quarter. Rambus Form 8-K, third-quarter 2026 results press release · as of
- Inventory rose to $74.8 million from $44.1 million; management attributes the build to customers ordering backlog earlier. 24/7 Wall St., 5 November 2026 · as of
- Susquehanna kept a Neutral rating on Rambus and raised its price target to $103. Susquehanna note via company-news headline · as of
- MarketBeat lists an average analyst target of $139.78 from 11 analysts, in a range of $90 to $172. MarketBeat RMBS price-target page · as of
- Director Charles Kissner sold 5,000 shares at $111.00 on 2 October 2026 and 5,000 shares at $105.00 on 22 September 2026, both under Rule 10b5-1 plans. SEC Form 4 filings, 5 October 2026 and 24 September 2026 · as of
- Micron reported fiscal fourth-quarter 2026 revenue of $54.23 billion versus $11.32 billion a year earlier and guided fiscal first-quarter 2027 revenue to $61.5 billion, plus or minus $1.5 billion. Micron fiscal fourth-quarter 2026 press release · as of
Sources
- This Little-Known Semiconductor Stock Has a Big AI Connection · 247wallst.com ·
- MarketBeat
- NVIDIA Sets Conference Call for Third Quarter Financial Results · investor.nvidia.com
- Rambus Shares Tumble 23% After Q1 Guidance Falls Short of Expectations · pulse.bot
- Rambus Stock (-11%): Dragged Down by South Korean Memory Sector Crash · trefis.com ·
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