Gen 2 VPD Boosts VICR's Power Management Prospects Against TXN & ADI

Vicor's Gen 2 VPD targets higher AI power density, while licensing, customer programs and added capacity could expand its data-center opportunity.

Zacks Equity Research

3 min read

Vicor VICR is strengthening its AI infrastructure prospects through its second-generation Vertical Power Delivery (VPD) technology, which addresses the rising compute-density and power-delivery requirements of artificial intelligence (AI) data centers. AI hyperscalers and original equipment manufacturers (OEMs) increasingly need VPD to meet compute-density and AI-performance requirements. Vicor’s Gen 2 VPD targets current gains above 40 and current density of up to 5 amps per square millimeter (mm²), potentially strengthening its competitive position against broader power-management players such as Analog Devices ADI and Texas Instruments TXN.

The technology could become increasingly relevant as hyperscalers and OEMs seek denser and more efficient processor-power architectures. Vicor has completed an initial chipset delivering about 3 amps per square millimeter for a lead customer and is developing demonstration systems for additional customers. Strong signal integrity and thermal-management capabilities further support Vicor’s differentiation as AI power architectures migrate toward lower operating voltages.

Vicor’s opportunity extends beyond customers adopting a complete Gen 2 VPD architecture. Vicor has been approached by a couple of companies seeking to use its technology alongside integrated voltage regulators (IVRs). Vicor can provide current-multiplication technology alongside IVRs, allowing it to capture content even when customers select alternative architectures. Its Factorized Power System offers significantly higher current density and efficiency, while IVR-based approaches can involve roughly 10-15% insertion losses.

Customer engagement and licensing could provide additional growth avenues. Vicor expects to engage with a hyperscaler and a couple of OEMs during the remainder of 2026, with these programs potentially moving into production in the third or fourth quarter of 2027. Its 1.5-millimeter package and thermal-management capabilities could help meet increasingly demanding AI packaging requirements. Vicor expects future relationships to combine intellectual property (IP) licensing with product sourcing related to second-generation VPD, creating opportunities to generate both royalty and product revenues.

Strong demand is supporting manufacturing expansion. Backlog reached roughly $380 million in the second quarter of 2026, rising 26% sequentially, with management noting that the latest licensing agreement contributed relatively little to the increase. Vicor’s first ChiP fab is approaching full capacity utilization, prompting plans for a second facility that could initially roughly double capacity and provide further expansion flexibility. The company expects revenues to increase nearly 10% sequentially in the third quarter of 2026 and exceed $600 million for the full year, supported by planned double-digit sequential growth in Advanced Products product revenues. The additional capacity should help support future VPD ramps while advancing Vicor’s longer-term objective of $2.5 billion in revenues and a 70% gross margin.

VICR Faces Tough Competition

ADI represents a notable challenge through its expanding high-density processor-power portfolio. Its intermediate-to-core solutions target next-generation processors operating at up to 6,000 amps and below 1 volt. The Empower Semiconductor acquisition allows ADI to take power directly into the processor package, while ADI believes its architecture can reduce compute power consumption and temperature by roughly 10-15%. Data-center power revenues grew more than 100% year over year in the third quarter of fiscal 2026.

TXN challenges VICR through its broad AI data-center power-tree portfolio and manufacturing scale. The company says many of its chips are used in the data-center power tree, while its ability to supply from dependable capacity is becoming an advantage as the market expands. Data-center revenues doubled year over year in the second quarter of 2026, and TXN says its investments in inventory and capacity, along with available clean-room space, position it to support continued growth.

VICR’s Share Price Performance, Valuation & Estimates

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Shares of Vicor have appreciated 73.3% year to date compared with the broader Zacks Computer and Technology sector’s 14.4% growth.

VICR Stock’s Price Performance

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The VICR stock is trading at a premium, with a forward 12-month price-to-earnings ratio of 36.44X compared with the broader sector’s 20.66X. Vicor has a Value Score of F.

VICR’s Valuation

The Zacks Consensus Estimate for Vicor’s 2026 earnings is currently pegged at 71 cents per share, unchanged over the past 30 days, suggesting 12.70% year-over-year growth.

Vicor Corporation Price and Consensus

Vicor Corporation price-consensus-chart | Vicor Corporation Quote

Vicor currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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