Vicor Stock Climbs 9% for Second Day as AI Data Center Demand Drives 79% Revenue Jump and Backlog Surge

NEW YORK — Shares of Vicor Corp. rose more than 9% in early trading Wednesday, extending a rally that began after the power component maker reported strong third-quarter results.

The stock gained $18.56 to $222.70 shortly after the opening bell, giving the company a market value of about $9.4 billion. On Tuesday, the shares rose about 7% after Vicor released its earnings before the market opened.

Wednesday's gains came as AI infrastructure stocks rallied more broadly after strong reports from SpaceX and Super Micro Computer.

Results beat expectations

Vicor, based in Andover, Massachusetts, reported third-quarter product and royalty revenue of $197.1 million. That was up 78.5% from $110.4 million a year earlier and up 37.5% from $143.4 million in the second quarter. Analysts had expected revenue of about $184 million to $187 million.

Net income more than doubled to $63.3 million, or $1.33 per diluted share, from $28.3 million, or 63 cents per share, a year earlier.

Profitability also improved sharply. Gross margin rose to 68.3% from 57.5% a year earlier and was up more than 10 percentage points from the second quarter.

Backlog and royalties

Vicor's order backlog rose 166% from a year earlier to $406 million, up 7% from the second quarter. That suggests demand remains strong heading into the fourth quarter.

Royalty revenue, which comes from licensing Vicor's power technology to other companies, was $66.6 million. On the earnings call, the company said that figure included some catch-up royalties, meaning part of the amount related to earlier periods. Analysts asked for more detail on how much of the royalty revenue may not recur.

For the current quarter, Vicor said on its call that it expects product revenue to rise by a low double-digit percentage.

The company's finances also strengthened. Cash from operations was $69.7 million, up from $38.5 million a year earlier. Cash and cash equivalents rose 13.1% from the previous quarter to $513.1 million at the end of September.

An AI power play

Vicor makes modular power components that convert and deliver electricity to processors. As AI chips use more power, efficiently delivering electricity inside servers has become an important engineering challenge, and Vicor has positioned its technology as a solution for high-performance AI computing.

That has made the company one of the stock market's best-performing AI-related names. Before this week, Vicor shares were up about 87% this year. Over the past 52 weeks, the stock has gained about 138%.

Valuation concerns

The big gains have raised questions about valuation. Some analysts and investment commentators have said the stock trades at a high premium to its historical value and that investors may want to wait for a pullback before buying.

The company's trailing price-to-earnings ratio is about 61, below its five-year median of about 74 but still high, reflecting strong expectations for future growth.

Broader rally

Vicor's rise Wednesday added to a broad rebound in AI infrastructure stocks. Last week, rising bond yields, hotter-than-expected inflation and concerns about financing AI projects led to a sharp selloff in the sector.

After the market closed Tuesday, SpaceX reported third-quarter revenue of $14.58 billion, well above estimates and driven by its AI cloud business. Super Micro Computer said its fiscal first-quarter revenue would be about $4 billion above its own forecast. Both reports reassured investors that spending on AI data centers remains strong. Power and cooling suppliers such as Vicor and Vertiv rose with server makers and chip stocks.

Investors will now watch whether Vicor can keep its strong margins and convert its growing backlog into sales in the coming quarters, and how much of its royalty revenue will continue going forward.