NVIDIA-supplier Vicor Corp (NASDAQ:VICR) plunged 22% early Wednesday following in-line results and guidance, but bookings and backlog were "underwhelming," according to analysts. Further, the management's tone on the recent AI platform win, which is now thought to be NVIDIA's (NASDAQ:NVDA) GH200 "appeared more cautious." The results and comments prompted Needham & Company analysts to downgrade the stock from Buy to Hold, noting next year now looks to be a "transition year."
Analysts highlighted that a book-to-bill ratio of around 0.6 was much lower than the 1:1 expected by investors. In addition, backlog fell 19.6% quarter-over-quarter and 53% year-over-year to $174.77 million.
"Following 2Q23, we believe investors anticipated B:B to approach 1:1 by 4Q23, but management declined to provide any color on when bookings and B:B would recover," analysts commented. "Visibility is clouded by the complex landscape: legacy programs are ramping down while new programs are ramping up. Near-term, we expect lateral/lateral-vertical wins will generate bookings."
On AI, analysts noted that management sounded more cautious on the recent AI platform win.
"Management was much more reserved when discussing the AI platform win announced last quarter," analysts said. "The company was less willing to discuss customer and product specifics, raising concerns this opportunity has shrunk. Vicor's first area of focus remains ramping solutions for this platform (Gen4 48V bus converter and factorized power point-of-load products) in the new ChiP fab, but we expect investors to be disheartened in the near-term. We now believe this win is for NVDA's GH200 product instead of H100."
Finally, Vicor has officially verified that Google (NASDAQ:GOOGL) is transitioning to a two-stage power delivery design for its motherboards. Moreover, they hold the belief that Delta has supplanted Vicor's NBM's in a substantial portion of this market.