This under-the-radar Nvidia derivative play is up nearly 60% this week

Published Thu, Jul 27 202311:06 AM EDT

Investors on the hunt for under-the-radar ways to play the booming artificial intelligence theme may want to take a look at this Nvidia derivative play up nearly 60% this week. Vicor Corporation , a designer and manufacturer of power components and semiconductor power supply modules, reported better-than-expected second-quarter results this week and hinted at a new AI platform design win that some analysts believe is Nvidia's H100 graphics processing unit. The company also shared above consensus third-quarter expectations and said it anticipates a recovery in bookings. While Craig-Hallum and Needham both said they believe Nvidia is the AI platform in question, Vicor CEO Patrizio Vinciarelli simply referred to the project as a "new generation" for an "existing customer" during an earnings call Tuesday. CNBC has reached out to Vicor for comment. VICR YTD mountain Vicor shares in 2023 Craig-Hallum analyst Richard Shannon upgraded the stock to a buy rating this week, citing Vicor's exposure to electric vehicles and artificial intelligence — the largest technology trends over the next ten years. The stock surged about 58% during Wednesday's session, blowing past Craig-Hallum's adjusted $80 price target. "Combined with what we believe will be a noticeable ramp in the Auto space in C25, where VICR's benefit in terms of size, weight and efficiency will be welcome, VICR's earnings power out a few years can be dramatic," he wrote in a Wednesday note. Needham also believes that the Vicor remarks may signal a relationship with Nvidia. It called company the "supplier of choice" for AI accelerator power management. The Wall Street firm boosted its price target to $75 a share, and speculates that Vicor already has an initial backlog of orders for the ramp in this AI platform. "We expect orders for this new platform to increase sequentially over the next couple of quarters to support CY24 requirements," the firm said. "To the extent this customer adopts a lateral vertical [power distribution network] in the future, we expect Vicor's share could increase above the initial share allocation the company has received." Vicor shares have surged 73% year to date and dipped 1% during Thursday's session. — CNBC's Michael Bloom contributed reporting