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Rambus (RMBS) Surges 14.9%: Is This an Indication of Further Gains?

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Rambus (RMBS - Free Report) shares ended the last trading session 14.9% higher at $88.58. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 0.4% gain over the past four weeks.

Rambus is benefiting from strong growth in its memory interface chip business, particularly DDR5 products, driving record product revenue and market outperformance.

This memory chip designer is expected to post quarterly earnings of $0.62 per share in its upcoming report, which represents a year-over-year change of +24%. Revenues are expected to be $175 million, up 19.2% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Rambus, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on RMBS going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Rambus is a member of the Zacks Electronics - Semiconductors industry. One other stock in the same industry, Lam Research (LRCX - Free Report) , finished the last trading session 7.7% higher at $115.58. LRCX has returned 0.6% over the past month.

For Lam Research, the consensus EPS estimate for the upcoming report has changed -0.3% over the past month to $1.21. This represents a change of +40.7% from what the company reported a year ago. Lam Research currently has a Zacks Rank of #3 (Hold).


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