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The company’s shares have also underperformed its peers, which include Lam Research (LRCX - Free Report) , KLA Corporation (KLAC - Free Report) and MKS Instruments (MKSI - Free Report) . All three companies, Lam Research, KLA and MKS Instruments, are expanding their footprint in the semiconductor equipment and technology sector. Shares of Lam Research, KLA and MKS Instruments have surged 92.5%, 62% and 70.9%, respectively, in the year-to-date period.
The underperformance stems from customer concentration, inventory and capex execution, tariffs, currency swings, and convertible debt complexity.
However, the company’s shares have outperformed the Zacks Computer & Technology sector’s rise of 25.8%. The outperformance reflects the company’s expanding portfolio and strong demand in the semiconductor and data center computing markets. Growth in the semiconductor market is driven by strong customer demand for eVoS and eVerest products. The data center computing market benefited from hyperscale expansion and artificial intelligence (AI) investments. These factors are helping AEIS fend off competitors such as Lam Research, KLA, and MKS Instruments.
AEIS Stock Performance
Image Source: Zacks Investment Research
AEIS Benefits From Strong Semiconductor Growth
Advanced Energy is benefiting from robust demand for semiconductor equipment, driven by increasing investments in leading-edge memory and logic technologies. Rising etch and deposition intensity, coupled with growing complexity in advanced semiconductor manufacturing, is boosting demand for the company’s precision power solutions. In the second quarter of 2026, semiconductor revenues jumped 33% year over year to a record $278 million.
The company’s next-generation eVerest and eVoS plasma power platforms are gaining traction, delivering improved yield and throughput for advanced manufacturing processes. Design wins across semiconductor testing, atomic layer deposition, and thermal sensing applications further strengthen its competitive positioning. The company expects semiconductor revenues to grow nearly 50% year over year in the second half of 2026, and believes new product adoption can support market share gains into 2027 and beyond.
AEIS Rides On Strong Data Center Demand
Advanced Energy is benefiting from robust demand for precision power solutions, driven by accelerating investments in AI infrastructure and hyperscale data centers. The company’s expanding relationships with hyperscale customers, growing design-win pipeline, and next-generation power technologies are strengthening its position in the rapidly evolving data center market.
In the second quarter of 2026, Data Center Computing revenues increased 35.2% year over year to $191.5 million, driven by strong hyperscale demand. Advanced Energy expects data center revenues to increase more than 50% in 2026. Accelerating hyperscale investments and the ramp-up of next-generation programs are expected to sustain this momentum.
Advanced Energy’s investments in 800-volt power architectures represent another significant growth opportunity. Its modular AC-DC and DC-DC solutions offer approximately 98% efficiency, high power density and reliability. Initial production revenues are expected in late 2027, followed by a more meaningful ramp in 2028. This transition could expand Advanced Energy’s power content per rack and create additional long-term revenue opportunities.
Further expanding its portfolio in June 2026, AEIS announced its new ADH series DC-DC converters for next-generation 800V DC AI data center power architectures, delivering up to 8 kW peak power with 98.2% efficiency and enabling megawatt-scale AI server racks through high-density, liquid-cooled power solutions.
AEIS Offers Positive Q3 Guidance
AEIS’s strong customer demand and growth across data center computing and semiconductor markets are expected to benefit the company’s top-line growth.
For the third quarter of 2026, Advanced Energy expects revenues of $640 million, plus or minus $20 million. Non-GAAP earnings are projected to be $3 per share, plus or minus 25 cents.
For the third quarter of 2026, the Zacks Consensus Estimate for earnings is pegged at $3.06 per share, which has been unchanged over the past 30 days. The figure implies a year-over-year increase of 75.86%.
The Zacks Consensus Estimate for the third quarter of 2026 revenues is pegged at $647.70 million, suggesting a year-over-year increase of 39.80%.
Advanced Energy Industries, Inc. Price and Consensus
Advanced Energy shares are currently overvalued, as suggested by its Value Score of F.
In terms of the forward 12-month Price/Earnings ratio, AEIS is trading at 25.05X, higher than the Computer & Technology sector’s 21.39X.
AEIS Valuation
Image Source: Zacks Investment Research
What Should Investors Do With AEIS Stock?
Advanced Energy’s robust and diversified portfolio to meet the rising demand for AI-driven technologies, particularly in data center computing and semiconductor markets, is contributing to its growth prospects continuously, driving top-line growth. These factors have justified its premium valuation.
View the Zacks #1 Rank List
Image: Bigstock
Advanced Energy Soars 40% YTD: Is the Stock Worth Buying Now?
Key Takeaways
Advanced Energy (AEIS - Free Report) shares have rallied 39.6% in the year-to-date period, underperforming the Zacks Semiconductor Equipment - Wafer Fabrication industry’s surge of 70.2%.
The company’s shares have also underperformed its peers, which include Lam Research (LRCX - Free Report) , KLA Corporation (KLAC - Free Report) and MKS Instruments (MKSI - Free Report) . All three companies, Lam Research, KLA and MKS Instruments, are expanding their footprint in the semiconductor equipment and technology sector. Shares of Lam Research, KLA and MKS Instruments have surged 92.5%, 62% and 70.9%, respectively, in the year-to-date period.
The underperformance stems from customer concentration, inventory and capex execution, tariffs, currency swings, and convertible debt complexity.
However, the company’s shares have outperformed the Zacks Computer & Technology sector’s rise of 25.8%. The outperformance reflects the company’s expanding portfolio and strong demand in the semiconductor and data center computing markets. Growth in the semiconductor market is driven by strong customer demand for eVoS and eVerest products. The data center computing market benefited from hyperscale expansion and artificial intelligence (AI) investments. These factors are helping AEIS fend off competitors such as Lam Research, KLA, and MKS Instruments.
AEIS Stock Performance
Image Source: Zacks Investment Research
AEIS Benefits From Strong Semiconductor Growth
Advanced Energy is benefiting from robust demand for semiconductor equipment, driven by increasing investments in leading-edge memory and logic technologies. Rising etch and deposition intensity, coupled with growing complexity in advanced semiconductor manufacturing, is boosting demand for the company’s precision power solutions. In the second quarter of 2026, semiconductor revenues jumped 33% year over year to a record $278 million.
The company’s next-generation eVerest and eVoS plasma power platforms are gaining traction, delivering improved yield and throughput for advanced manufacturing processes. Design wins across semiconductor testing, atomic layer deposition, and thermal sensing applications further strengthen its competitive positioning. The company expects semiconductor revenues to grow nearly 50% year over year in the second half of 2026, and believes new product adoption can support market share gains into 2027 and beyond.
AEIS Rides On Strong Data Center Demand
Advanced Energy is benefiting from robust demand for precision power solutions, driven by accelerating investments in AI infrastructure and hyperscale data centers. The company’s expanding relationships with hyperscale customers, growing design-win pipeline, and next-generation power technologies are strengthening its position in the rapidly evolving data center market.
In the second quarter of 2026, Data Center Computing revenues increased 35.2% year over year to $191.5 million, driven by strong hyperscale demand. Advanced Energy expects data center revenues to increase more than 50% in 2026. Accelerating hyperscale investments and the ramp-up of next-generation programs are expected to sustain this momentum.
Advanced Energy’s investments in 800-volt power architectures represent another significant growth opportunity. Its modular AC-DC and DC-DC solutions offer approximately 98% efficiency, high power density and reliability. Initial production revenues are expected in late 2027, followed by a more meaningful ramp in 2028. This transition could expand Advanced Energy’s power content per rack and create additional long-term revenue opportunities.
Further expanding its portfolio in June 2026, AEIS announced its new ADH series DC-DC converters for next-generation 800V DC AI data center power architectures, delivering up to 8 kW peak power with 98.2% efficiency and enabling megawatt-scale AI server racks through high-density, liquid-cooled power solutions.
AEIS Offers Positive Q3 Guidance
AEIS’s strong customer demand and growth across data center computing and semiconductor markets are expected to benefit the company’s top-line growth.
For the third quarter of 2026, Advanced Energy expects revenues of $640 million, plus or minus $20 million. Non-GAAP earnings are projected to be $3 per share, plus or minus 25 cents.
For the third quarter of 2026, the Zacks Consensus Estimate for earnings is pegged at $3.06 per share, which has been unchanged over the past 30 days. The figure implies a year-over-year increase of 75.86%.
The Zacks Consensus Estimate for the third quarter of 2026 revenues is pegged at $647.70 million, suggesting a year-over-year increase of 39.80%.
Advanced Energy Industries, Inc. Price and Consensus
Advanced Energy Industries, Inc. price-consensus-chart | Advanced Energy Industries, Inc. Quote
AEIS Stock Is Overvalued
Advanced Energy shares are currently overvalued, as suggested by its Value Score of F.
In terms of the forward 12-month Price/Earnings ratio, AEIS is trading at 25.05X, higher than the Computer & Technology sector’s 21.39X.
AEIS Valuation
Image Source: Zacks Investment Research
What Should Investors Do With AEIS Stock?
Advanced Energy’s robust and diversified portfolio to meet the rising demand for AI-driven technologies, particularly in data center computing and semiconductor markets, is contributing to its growth prospects continuously, driving top-line growth. These factors have justified its premium valuation.
AEIS stock currently carries a Zacks Rank #2 (Buy), which implies that investors should start accumulating the stock right now. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.