GrowthTurtle
Data Science PhD & IEEE Fellow, Ex-Two Sigma
Vicor's purchase of land for more fabs is a demand signal no guidance could ever match. Per @joedab12, Vicor bought a second building with land for one or two more fabs, plus another site with room for two. CEO Patrizio Vinciarelli said in June that first-generation vertical power delivery is about 15-20% of 2026 revenue and will jump substantially in 2027, and that second-generation VPD will be filling a multiplicity of fabs. x.comÂ
Vicor is the pure-play on vertical power delivery, the AI rack's quiet bottleneck. Accelerators draw 1,500W+, lateral routing loses 20% to resistance, and next-gen packages above 3,000W hit copper's limits, so either vertical power becomes standard or the AI roadmap stalls. Only Vicor and Monolithic Power really ship factorized vertical power. At a $12B cap, 27x EV/sales and 85x P/E the stock is rich, a price for the moat; if hyperscalers standardize on it, revenue could go vertical. x.com x.com x.comÂ
Vicor raised its Q3 sequential revenue growth guidance again, from more than 20% to more than 30%, which explains why the stock held strong at its $280 pivot despite fears across the rest of the market. x.comÂ
Vicor's AI power-delivery royalties now have evidence of recurring usage, while funded fab expansion offers a path past capacity constraints. Q3 royalties reached $66.6M, including catch-ups; management set a conservative Q4 baseline of at least $43M without new deals, and early orders from the same AI OEM confirm ongoing payments. Backlog reached $406M, and planned Fab 2 and Fab 3 sites could bring capacity to nearly 5x Fab 1, with initial Fab 2 equipment targeted for Q2 2027. x.comÂ
Vicor's accelerating business and operating leverage make it look like an incredible winner. Revenue and operating margins jumped in the latest quarter; CEO Patrizio Vinciarelli said two additional sites would enable nearly 5x Fab-1's capacity across three fabs, citing demand and industry trends. But QQQ could fall to 660 before a meaningful bounce, so Vicor is not a buy in this tape. x.com x.comÂ
Vicor stands to capture demand for high-density power delivery as power conversion moves closer to the AI processor, with royalties as early optional upside. On September 30 Vicor raised Q3 growth guidance from over 20% to over 30% because VPD royalties beat expectations, as Delta, Eaton, EPC and others showed 800VDC systems and converters with fewer conversion stages. Vicor expects to finish modernizing FAB1 by year-end, expanding capacity for high-density modules, with FAB2 to follow. x.comÂ
Vicor's vertical power delivery is converting from a technology story into real royalty revenue. Vicor raised Q3 sequential revenue growth guidance again, from 20%+ to 30%+, on higher VPD licensing royalties, its second raise in about nine days. Against Q2 revenue of $143.4M, that implies roughly $186M+ in Q3, and repeated raises suggest AI power architecture demand may be stronger than expected. Q3 earnings should show royalty scale, VPD customer expansion and 2027 growth visibility. x.comÂ
Vicor's licensing model is delivering: it raised Q3 guidance for the second time in nine days, now expecting more than 30% sequential revenue growth, up from more than 20% and about 10% before, on higher royalties from its first non-exclusive Vertical Power Delivery license. Every rack shipping with its vertical power delivery pays Vicor whether or not it builds the module. From Q2's $143.4M that puts Q3 above $186M, and high-margin royalties should lift earnings more than revenue. x.comÂ
Vicor's Google renewal could pay 3-4x the original license if discounted to encourage direct Gen2 VPD purchases. Without a discount, doubled NBM payments plus VPD at 4x the original NBM amount could total 6x, as 2027 TPU volumes may double. Roth says Vicor alleges Google received its tailored VPD design in 2018. Gen2 wins beyond Cerebras remain key; Google and AMD look likely to ramp from late 2027. $1.8B revenue in 2028 is a realistic bet. x.com x.comÂ
Vicor's efficient delivery of key power modules is part of the case for Cerebras meeting and exceeding its 2028-29 numbers. As models improve, more security breaches and deployments should make Cerebras look increasingly like a cybersecurity play. Its revenue ramp looks constrained by capacity, not yet by demand. Bullish on Cerebras but cautious on the broader market, with no short-term earnings prediction. x.com x.com x.com x.comÂ
Vicor's patent licensing now earns twice the profit of its factory, making the once-doubted royalty engine its larger profit contributor. CVResearch_ reports $66.6 million of royalties last quarter, versus $21.7 million a year earlier; per its report, the CFO expects at least $43 million next quarter without new licenses. Rough market conditions have battered the stock despite that fundamental improvement. x.com x.comÂ
Celestica's cheap TPU exposure offers upside, but its low margins and smaller moat than Vicor's make it a trade rather than a large core holding. It will probably reach $400-$500 over time; $400 next year looks likely. An attached analyst note expects scrutiny of a cut in 2026 free-cash-flow guidance from $600M to $460M due mainly to working capital; it warns that 2027 free cash flow could turn negative if working-capital investment stays high alongside $1.5B-$2B of capex. x.com x.com x.comÂ
