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Can AEHR's Diversification Strengthen Its Growth Outlook?
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Key Takeaways
AEHR has shifted sharply beyond EV-related SiC, with AI and other markets driving most fiscal 2026 revenues.
AI processors and silicon photonics are gaining momentum, supported by new follow-on production orders.
AEHR's $100.6 million backlog and $130-$150 million fiscal 2027 revenue outlook support near-term growth.
Aehr Test Systems, Inc. (AEHR - Free Report) is building a broader growth story as demand expands beyond its traditional silicon carbide (SiC) exposure. Two years ago, more than 95% of its business was tied to SiC for electric vehicles (EVs). In fiscal 2026, nearly 95% of revenues came from markets outside EV-related SiC, signaling a major shift in its business mix.
AI has emerged as the biggest new contributor. AI accelerators, CPUs and network processors accounted for about 71% of fiscal 2026 revenues, while optical device test and burn-in for data-center infrastructure transceivers, chip-to-chip I/O and hard disk drives represented another 20%. The momentum has continued into fiscal 2027, with AEHR securing a $22 million follow-on order for AI processor wafer-level burn-in (WLBI) systems in August. Silicon photonics has also gained traction, with another follow-on production order received in August.
Power semiconductors provide another leg to the growth story. AEHR received roughly $8 million of new SiC WLBI orders in July as EV programs picked up. The company is also expanding into gallium nitride applications, while memory remains a longer-term opportunity spanning NAND and high-bandwidth memory (HBM).
This wider exposure could make AEHR less dependent on a single end market and help smooth its growth profile over time. The company’s $100.6 million effective backlog and $130-$150 million fiscal 2027 revenue outlook provide support for near-term growth. Still, sustaining that pace will depend on continued ramps in AI and silicon photonics, a recovery in power semiconductor demand and successful expansion into new applications.
AEHR Faces Stiff Competition
Aehr operates in a highly competitive semiconductor test equipment market, contending with strong rivals such as Teradyne, Inc. (TER - Free Report) and FormFactor, Inc. (FORM - Free Report) .
Teradyne is benefiting from the AI-led expansion in semiconductor testing, with its Semiconductor Test business gaining from rising demand for advanced compute and memory chips. HBM, DRAM and NAND testing are emerging as key growth drivers, strengthening TER’s position in the expanding AI test market.
FormFactor is benefiting from rising testing requirements for AI and HBM, particularly through its probe card business. Strong demand for DRAM and Foundry & Logic applications is supporting growth as AI workloads drive greater complexity and testing intensity across advanced semiconductors.
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Can AEHR's Diversification Strengthen Its Growth Outlook?
Key Takeaways
Aehr Test Systems, Inc. (AEHR - Free Report) is building a broader growth story as demand expands beyond its traditional silicon carbide (SiC) exposure. Two years ago, more than 95% of its business was tied to SiC for electric vehicles (EVs). In fiscal 2026, nearly 95% of revenues came from markets outside EV-related SiC, signaling a major shift in its business mix.
AI has emerged as the biggest new contributor. AI accelerators, CPUs and network processors accounted for about 71% of fiscal 2026 revenues, while optical device test and burn-in for data-center infrastructure transceivers, chip-to-chip I/O and hard disk drives represented another 20%. The momentum has continued into fiscal 2027, with AEHR securing a $22 million follow-on order for AI processor wafer-level burn-in (WLBI) systems in August. Silicon photonics has also gained traction, with another follow-on production order received in August.
Power semiconductors provide another leg to the growth story. AEHR received roughly $8 million of new SiC WLBI orders in July as EV programs picked up. The company is also expanding into gallium nitride applications, while memory remains a longer-term opportunity spanning NAND and high-bandwidth memory (HBM).
This wider exposure could make AEHR less dependent on a single end market and help smooth its growth profile over time. The company’s $100.6 million effective backlog and $130-$150 million fiscal 2027 revenue outlook provide support for near-term growth. Still, sustaining that pace will depend on continued ramps in AI and silicon photonics, a recovery in power semiconductor demand and successful expansion into new applications.
AEHR Faces Stiff Competition
Aehr operates in a highly competitive semiconductor test equipment market, contending with strong rivals such as Teradyne, Inc. (TER - Free Report) and FormFactor, Inc. (FORM - Free Report) .
Teradyne is benefiting from the AI-led expansion in semiconductor testing, with its Semiconductor Test business gaining from rising demand for advanced compute and memory chips. HBM, DRAM and NAND testing are emerging as key growth drivers, strengthening TER’s position in the expanding AI test market.
FormFactor is benefiting from rising testing requirements for AI and HBM, particularly through its probe card business. Strong demand for DRAM and Foundry & Logic applications is supporting growth as AI workloads drive greater complexity and testing intensity across advanced semiconductors.
AEHR’s Share Price Performance, Valuation & Estimates
AEHR’s shares have surged 152.6% over the past six months, outperforming the broader industry’s 17.3% growth.
Image Source: Zacks Investment Research
Aehr shares are trading at a premium. On a forward 12-month price-to-sales (P/S) basis, AEHR trades at 19.05X, higher than the industry’s 5.72X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for AEHR’s fiscal 2027 earnings is pegged at 74 cents per share, a sharp increase from 3 cents a year ago.
Image Source: Zacks Investment Research
Aehr currently carries a Zacks Rank#2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.