Investment Opportunity:
For the last 10 years, Vicor (NASDAQ:VICR) has invested over $400,000,000 in new proprietary 48V power converters. They anticipated a shift to a 48V power train in the data center, automobiles, LED lighting and power tools. This shift is happening now and their investment will lead to a dramatic increase in revenue and earnings in the coming years.
While Vicor has targeted very high volume customers with this new technology, for several years Alphabet (GOOG) (GOOGL) was their only large customer. This led to a lumpy revenue stream. A couple of years ago, they added Nvidia (NVDA) to their customer list. Here is a picture of the Nvidia GPU with the Vicor (gold bars) converters. While adding Nvidia helped and increased their revenue, it was not enough to provide sustained and growing revenue.
The real opportunity for investors is now as Vicor has design wins with Intel (INTC), Advanced Micro Devices (AMD), Cerebras, Cray (HPE), IBM (IBM) and others to power their new high-current AI and GPU processors. These new opportunities are providing a diversified customer base that will allow for smoother and growing quarterly revenue. While these companies have taken delivery of Vicor converters for their prototype runs, production deliveries of their new processors are expected to be rolled out in 2020, and these deliveries will provide Vicor with a significant increase in revenue and earnings. This revenue increase will be incremental as these are all new opportunities.
Facebook (FB), Amazon (AMZN), Microsoft (MSFT) and almost all other major hyper data-centers are planning to roll out AI solutions in 2020 that will include the Vicor converts. Again, Vicor will see incremental revenue from these customers starting later this year.
Another new market for Vicor is the automotive market, where they have secured design wins from several automobile manufactures. They
