Growing 23.5% a year and setting new records. So why has its stock fallen by half?
Every memory manufacturer pays it royalties, it reports record results every quarter, and it has no debt. Yet its stock has lost nearly half its value since June. Behind the decline is a mechanism most AI investors don’t see—and on October 26, we’ll find out who understands it correctly.
Key points
Revenue is growing by an average of 23.5% a year and setting new records every quarter, yet the stock has fallen by half since June.
The company has no debt, $824.9 million in cash, and a 32% net margin—the kind software companies typically enjoy.
Samsung, SK hynix, and Micron all pay it royalties, but every contract has a fixed expiration date.
Baird downgraded the stock in April, and it fell 21% in a single day, even though the results were a record.
The Bulios model sees fair value at $63.12, while the consensus of ten analysts is $145.88—the difference rests on a single assumption.
A record year, a stock cut in half
Imagine a company whose revenue grows by an average of 23.5% a year, which ended 2025 with a record $707.6 million (+27%) and set another record the very next quarter. Now imagine its stock losing nearly half its value in four months. This isn’t a hypothetical example—it’s Rambus $RMBS .
In June, the stock hit a high of $174.10. On Friday, October 16, it closed at $87.25, then rebounded above $92 on Monday. Its market capitalization is now around $9.5 billion—a valuation for a company that reported record revenue of $207.4 million (+20% year over year) and net income of $67.6 million in the second quarter of 2026.
The market isn’t waiting around. Third-quarter results are due after the market closes on October 26, and the options market is pricing in a move of 14% in either direction. After each of its last three reports, the stock fell—even though the numbers were records. To understand why, you first need to know what Rambus actually sells.