Vicor CorporationVICR is benefiting from rising demand for high-density power delivery solutions as AI processors, data centers, industrial platforms and defense applications require more efficient power conversion. Growth in Advanced Products, a rising backlog and expanding licensing income are supporting its revenue outlook. However, manufacturing capacity constraints, customer program timing and uneven royalty recognition remain key challenges.
Vicor's second-quarter 2026 revenues increased 1.6% year over year to $143.4 million, exceeding the consensus estimate by 3.13%. Excluding $45 million in patent litigation settlement revenues recorded in the year-ago quarter, revenues increased 49.3%. Advanced Products revenues surged 45% sequentially to $94.2 million, accounting for 65.7% of total revenues. Product revenues rose 31.8% year over year to $112.9 million, while royalty revenues increased to $30.4 million from $10.4 million.
Demand momentum remains strong across high-performance computing, industrial, aerospace and defense markets. Vicor's book-to-bill ratio remained above 1, while its 12-month backlog increased 145% year over year to approximately $379.7 million. Management expects third-quarter revenues to grow nearly 10% sequentially, supported by double-digit sequential growth in Advanced Products. Vicor is targeting more than $600 million in 2026 revenues, reflecting product growth and licensing income.
Vicor is expanding manufacturing capacity to support rising demand. Its first fabrication facility, Fab 1, is approaching full capacity utilization, with additional equipment being installed to increase output. The company is also evaluating sites for a second fabrication facility, which management considers necessary to achieve its long-term revenue objective of $2.5 billion.
Technology differentiation and intellectual property licensing provide additional growth opportunities. Vicor's Factorized Power Architecture and Vertical Power Delivery (VPD) technologies are designed to improve power efficiency and current density for increasingly demanding AI processors. Second-generation VPD development with its lead customer has reached an initial chipset baseline, while development systems are being introduced to additional original equipment manufacturers and hyperscalers.
How Competitors Fare Against VICR Stock
Vicor competes with Monolithic Power SystemsMPWR and Analog DevicesADI. MPWR competes in high-performance power management for AI processors and data centers, while ADI competes in analog and power-management solutions for industrial, communications and computing applications.
Monolithic Power is benefiting from expanding power content across AI infrastructure, enterprise data and communications as customers adopt higher-density designs and module solutions. New customer ramps, platform refreshes and DDR5 orders expand its market, while sampling for 800-volt data-center architectures adds a growth avenue.
Analog Devices is benefiting from a broad-based recovery as Industrial demand improves and AI-related data center activity expands across optical and power applications. Long-cycle exposure to automation, test, aerospace and defense, energy systems and vehicle electrification supports durable growth.
VICR's Price Performance, Valuation and Estimates
Shares of Vicor have gained 88.5% year to date against the Zacks Electronics - Miscellaneous Components industry's decline of 20.2%.
VICR YTD Performance Chart
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From a valuation standpoint, VICR trades at a forward price-to-sales ratio of 10.25X, above the industry's average of 3.45X.
VICR Forward 12-Month (P/S) Valuation Chart
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The Zacks Consensus Estimate for VICR's 2026 and 2027 earnings implies year-over-year growth of 51% and 66%, respectively. The estimates for fiscal 2026 and 2027 have been revised upward in the past 30 days.
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Vicor currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).
