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Some selloffs reflect broken businesses. Others reflect broken expectations. Over the past three weeks, Vicor $VICR ( ▲ 2.74% ) has been firmly in the second group. Between October 1 and Monday's close, the stock fell from $308 to $190, a drop of about 38%. There was no guidance cut, no downgrade, and no company-specific bad news. Vicor was simply caught in the broad AI infrastructure selloff, as hot inflation data and rising borrowing costs pushed investors out of anything tied to data center spending.
$VICR down nearly 40% from its October high, right before its strongest quarter yet
Then, on Tuesday morning, the company reported the quarter that the May thesis was built on. Q3 revenue rose 78.5% year over year to $197.1 million, well above the roughly $184 million analysts expected. Royalties tripled. Gross margin jumped to 68.3%. Backlog hit $406 million. The market sold the AI trade, but the business kept compounding. Let's take a deeper dive.
💡In today’s deep dive, Investment Club members get the full Vicor breakdown: what nearly 5x factory capacity could mean, the valuation scenarios, and my FY27 price target. If you'd like to read the rest, you can become a member here.
George
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