Key Takeaways:
- Licensing Breakthrough: Vicor signed a new patent license agreement worth $60 million over two years, part of a growing IP licensing business.
- Price Projection: Based on current execution, VICR stock could reach $350.37 by December 2028.
- Potential Gains: This target implies a total return of 85.8% from the current price of $188.55.
- Annual Return: Investors could see roughly 30.5% annual growth over the next 2.3 years.
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Vicor (VICR) just posted a big jump in quarterly revenue. Q2 product and royalty revenue hit $143.4 million, up nearly 27% from Q1.
Advanced Products revenue, the company’s higher-margin power module business tied to AI data centers, jumped 45% sequentially to $94.2 million.
CEO Patrizio Vinciarelli raised the company’s long-term targets at a recent shareholder meeting, now aiming for $2.5 billion in revenue at 70% gross margins, up from a prior goal of $1 billion and 65% margins.
Getting there will require building a second chip fab, since the current facility in Andover, Massachusetts, is nearing full capacity.
Vicor’s backlog jumped 26% sequentially to $379.7 million, and management guided to nearly 10% sequential revenue growth in Q3, with over $600 million expected for the full year.
Much of the excitement centers on second-generation vertical power delivery, or VPD, technology used in AI chips and data centers.
Management says its current density and efficiency numbers are well ahead of competing solutions and expects to engage with a hyperscaler and multiple OEM customers to ramp this technology over the next year.
Despite the stock’s massive run this year, VICR trades at $188.55. Our model still sees substantial upside from here.
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What the Model Says for Vicor Stock
Vicor runs on two connected engines: selling power modules directly to customers, and licensing its patented power delivery technology to others.
The licensing side is becoming a bigger story. Management believes many companies in the AI supply chain use Vicor’s patented technology without paying for it, and the company has pursued patent enforcement actions to push those companies toward licensing deals.
Management expects more of this “crossing the chasm” moment to play out across the industry over the next couple of years.
On the product side, Vicor’s factorized power architecture delivers significantly higher current density than competing solutions, an important edge as AI chips demand more power in smaller spaces.
The company’s automatic test equipment business is also growing quickly, riding the broader AI infrastructure buildout.
Using a forecast of 32.3% annual revenue growth and 34.4% net income margins, our model projects the stock could climb to $350.37 within 2.3 years.
This assumes a 43.0x price-to-earnings multiple, in line with VICR’s current 43x multiple and well below its historical averages.
Our Valuation Assumptions
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Our Valuation Assumptions
TIKR’s Valuation Model lets you plug in your own assumptions for a company’s revenue growth, operating margins, and P/E multiple, and calculates the stock’s expected returns.
Here’s what we used for VICR stock:
1. Revenue Growth: 32.3%
Vicor grew revenue 26.1% over the past year, and management’s new $600 million-plus guidance for 2026 implies continued strong growth.
A second chip fab and expanding licensing deals should support elevated growth for years to come.
2. Operating margins: 34.4%
Net income margin sat at just 7.4% over the trailing twelve months, but that number should climb sharply as licensing revenue, which comes at close to 100% margin, becomes a larger share of the business alongside improving factory utilization.
3. Exit P/E Multiple: 43x
VICR currently trades at a 43x forward P/E, well below its five-, ten-, and fifteen-year averages, all above this level.
Our model holds the multiple near current levels rather than assuming a return to those historically higher multiples.
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What Happens If Things Go Better or Worse?
Vicor’s future depends heavily on how fast its licensing deals scale and whether its second fab comes online on schedule. Here’s how the stock might perform under different scenarios through December 2030:
- Low Case: If revenue growth slows to a 26.1% CAGR and net income margins settle at 30.9%, investors could still see a 131.8% total return (21.4% annually).
- Mid Case: With 28.9% growth and 32.9% margins, we expect a total return of 216.7% (30.5% annually).
- High Case: If new licensing deals close faster than expected and second-generation VPD ramps ahead of schedule, driving 31.8% revenue growth and 34.6% margins, returns could reach 321.1% total (39.4% annually).
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The range reflects new licensing deals closing and second-generation VPD ramps, with a second chip fab being built since the current one is almost fully utilized.
In the low case, licensing does not go through as planned, leading to slower revenue growth or delays in completing the second chip fab.
In the high case, new licensing deals close faster than expected, and second-generation VPD ramps ahead of schedule, and the second chip fab comes online as planned.
How Much Upside Does Vicor Stock Have From Here?
With TIKR’s new Valuation Model tool, you can estimate a stock’s potential share price in under a minute.
All it takes is three simple inputs:
- Revenue Growth
- Operating Margins
- Exit P/E Multiple
If you’re not sure what to enter, TIKR automatically fills in each input using analysts’ consensus estimates, giving you a quick, reliable starting point.
From there, TIKR calculates the potential share price and total returns under Bull, Base, and Bear scenarios so you can quickly see whether a stock looks undervalued or overvalued.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
