Vicor, a maker of brick-format DC-to-DC converters in Andover, Massachusetts, spent years watching a larger rival take the power socket inside Nvidia's flagship AI accelerator. In the June quarter it collected $30.4m in royalties from the industry that adopted the architecture it patented — about a fifth of core revenue, from customers who in many cases had to be compelled.

The compulsion is documented. In February 2025 the US International Trade Commission confirmed the validity and infringement of two Vicor patents and issued a limited exclusion order barring importation of unlicensed computing systems containing infringing power modules, with cease-and-desist orders naming Delta Electronics and Quanta entities. That order is why a hyperscaler and a set of original-equipment manufacturers now pay. A second enforcement case is expected to reach final determination in 2027.

The comp that hides the growth

Vicor's reported June quarter looks stagnant: revenue of $143.4m, up 1.6% year on year, with gross profit down 9.8%. The year-ago period contained a one-time $45m patent settlement. Adjusting for it, core product-plus-royalty revenue grew 49.3% and backlog rose 145% year on year to roughly $380m.

The forward book is the cleaner tell. One-year backlog climbed 26% sequentially to $379.7m, following a 70% sequential rise the quarter before, with orders coming from existing aerospace, defense, industrial and high-performance-computing customers rather than from licensing. Gross margin of 58.0% sits 730 basis points below last year but 280bp above the March quarter, and well clear of the 47.2% trough of early 2025. Management signed a new licence recognizing $15m in the quarter, structured as $60m over two years, raised its long-term target to $2.5bn of revenue at a 70% gross margin, and said a second chip fab would be needed to get there.

What makes the royalty line durable is arithmetic in the rack. Nvidia's rack generations step from 145kW to 330kW for Vera Rubin and on toward 570kW, with native 800-volt direct-current designs contemplated up to one megawatt. Currents that large make the old two-stage step-down physically wasteful and force vertical power delivery directly beneath the chip — Vicor's territory. Its second-generation parts reach 3 amps per square millimeter against roughly 1 for competing first-generation designs, though volume ramps are guided only to late 2027.

Same architecture, three different businesses

Monolithic Power, the fabless designer that took the Nvidia socket, is the one whose results already reflect all this. June-quarter revenue hit a record $980.6m, up 47.6% — the fourth straight quarter of acceleration — and operating margin widened to 31.0% from 24.8%. On its 30 July call it said enterprise-data revenue rose 45% sequentially with no concentrated customers, and lifted the growth floor for that business from 85% to 130%. Its shares fell 14.8% over three months regardless. At 35.8x trailing gross profit and 28.4x forward, it is cheaper than the 48.7x it commanded in early May but still the dearest name in analog.

Navitas is the case where the de-rating is earned. The Torrance, California designer of gallium-nitride and silicon-carbide power devices is one of about fifteen suppliers Nvidia has named for 800VDC, and it reported June revenue of $10.5m, down 27.3% year on year, with GAAP gross profit of minus $1.0m and a $27.2m operating loss. Trailing revenue is roughly $36.5m against a $3.3bn market value — 90.4x sales, with no earnings or gross-profit multiple available. Consensus does not see $200m of revenue before 2029. The shares sit 42% below the $21.89 at which the company raised $373m in the same quarter, and it is now fighting on two legal fronts: Wolfspeed sued in Delaware in July over five patents covering essentially the entire product line, and Navitas countersued Renesas over gallium-nitride patents in August.

The discount rate, not the demand

The selling was not gradual and was not about rack orders. Vicor dropped 19.2% in the 2 July session and 11.6% on 28 July; Navitas fell 21.0% the day after its results; Monolithic Power lost 10.4% on 5 June. Then, on 18 August, the 30-year Treasury yield topped 5.33%, a 19-year high, on inflation, a debt path approaching $40tn and questions about policy under new Federal Reserve chair Kevin Warsh — and the highest-multiple silicon de-rated together, with Microchip, Vicor, NXP, ON Semiconductor and Vertiv all rolling over from an uptrend within eight sessions. Eaton, the electrical-equipment maker selling into the same racks on a far lower multiple, rose 7.2% over the past month. Same content, different duration.

Vicor's trailing multiple on gross profit is now 34.7x, against 61.8x in mid-May, with the forward at 27.3x. Consensus asks for $603m of revenue this year and $939m next — numbers that require the backlog and the licence schedule to convert on time.

The setup

Where it stands — Vicor's order book and royalty stream are compounding while its multiple has roughly halved since May. Would confirm — One-year backlog holding above $380m in the September quarter with royalty revenue at or above $30m. Would invalidate — Gross margin slipping back toward the 55.2% of the March quarter, or licensees lapsing before the second trade case concludes. Watch next — Third-quarter results in October, and site selection for the second fab, guided within weeks of the July call. Valuation — 34.7x trailing gross profit and 27.3x forward, against 61.8x trailing in mid-May.