Vicor Corporation (NASDAQ:VICR) is becoming one of the more interesting ways to invest in the AI infrastructure buildout. The company makes the power systems that feed GPUs and networking chips. As AI processors become more power-hungry, getting electricity to those chips efficiently is becoming a bigger engineering problem.
The market has noticed. The stock almost doubled in September alone, and its forward P/E has reached 47.17x. That is a long way from the valuation of a forgotten power-electronics company it once was.
The interesting question now is whether Vicor can turn its technology and intellectual property into a much larger business before competitors catch up.
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Customers are already lining up
Vicor’s one-year backlog reached $379.7 million, up 26% from the previous quarter. Management expects more than $600 million of revenue in 2026. However, its licensing business has caught investors’ attention.
Vicor has spent years building patents around its power architecture, particularly Vertical Power Delivery (VPD), which places power-conversion technology much closer to the processor. As AI systems demand higher current density, Vicor believes conventional approaches will struggle to keep up.
That argument is starting to have commercial consequences. Four major OEMs and hyperscalers have now secured licenses, according to management, and a September agreement with another AI OEM helped push the company’s third-quarter revenue guidance higher again.
That creates an unusual second source of growth. Vicor can make money by selling its own modules, but it can also monetize its patents when customers source similar products elsewhere.
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The bottleneck may be Vicor itself
However, Vicor Corporation may have more demand than it can currently manufacture.
Management said its first chip fab is approaching capacity and that reaching its long-term $2.5 billion revenue target will require a second fab. In September, the company acquired sites in New Hampshire for Fab-2 and Fab-3. Fab-2 has roughly a one-year lead time to initial deployment.
That could be a good problem to have, but it creates a strange situation for investors. The $2.5 billion target is not just dependent on customers adopting Vicor’s technology. It depends on Vicor building enough capacity to serve them.
Management expects second-generation VPD systems to move into broader customer engagement now, with production ramps potentially beginning in late 2027. The company says its new generation can reach 3 amps per square millimeter today and move toward 5, while competing solutions are struggling at much lower levels.
If those claims translate into actual design wins, the opportunity gets considerably larger.
But 47.17x earnings leaves little room for disappointment
The problem is that investors are no longer valuing Vicor like a company waiting to prove itself.
There is also serious competition. Monolithic Power Systems, Texas Instruments, Analog Devices, and other power semiconductor companies have vastly greater scale. Meanwhile, the industry is moving toward 800V architectures, opening another competitive battlefield for companies such as Navitas and others.
Vicor’s advantage therefore has to be more than exposure to rising AI power demand. Its patents, packaging technology and current-density performance need to remain sufficiently differentiated to make customers choose its architecture.
The next few years should tell us a lot. Design wins for second-generation VPD, the ramp of Fab-2, continued licensing agreements and the conversion of backlog into revenue are the catalysts that can justify today’s valuation.
Conclusion
Vicor is no longer just a promising tech company. AI demand is strong, the licensing business is gaining traction, and the backlog remains robust. However, the stock’s rich valuation prices in a fair amount of that progress. The next test is whether Vicor can add enough capacity and win enough next-generation designs to grow into the valuation.
Market Sentiment
Hedge fund sentiment toward Vicor strengthened considerably in the second quarter. According to Insider Monkey’s database, 55 hedge funds held the stock in Q2, up from 42 in Q1. The value of those positions also jumped to about $907.3 million from $333.2 million. That suggests institutional interest in Vicor increased meaningfully as investors looked for ways to benefit from the growing demand for AI power infrastructure.
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This article is originally published at Insider Monkey.
