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AEIS Rides on Strong Data Center Demand: Can It Outpace KLA & MKS?
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Key Takeaways
AEIS's data center revenues surged 35.2% to $191.5M in Q2 2026 on strong hyperscale demand.
Advanced Energy expects data center revenues to grow more than 50% in 2026, fueled by AI demand.
AEIS's expanding power portfolio boosts growth prospects amid stiff competition from KLAC and MKSI.
Advanced Energy (AEIS - Free Report) is benefiting from robust demand for precision power solutions, driven by accelerating investments in artificial intelligence (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 competitive position against KLA (KLAC - Free Report) and MKS (MKSI - Free Report) 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.
The company’s expanding portfolio has been noteworthy. AEIS recently introduced three new M-CRPS power supplies offering 3200W and 3600W output capacities for AI data centers, networking and telecommunications applications. The OCP-compliant solutions deliver power densities exceeding 100 W per cubic inch, supporting increasingly demanding AI infrastructure requirements. Featuring advanced cybersecurity capabilities, high efficiency and improved thermal performance, the new products are designed to support next-generation CPU and GPU workloads while simplifying system integration and accelerating deployment.
AEIS’s expanding portfolio and strong growth across the data center computing market are expected to boost top-line growth and position it favorably against KLA and MKS. For the third quarter of 2026, Advanced Energy expects revenues of $640 million, plus or minus $20 million.
AEIS Faces Stiff Competition
The company is facing stiff competition from companies like KLA and MKS. Both companies are expanding their footprint in the data center space.
KLAC is benefiting from robust data center demand, driven by accelerating AI infrastructure investments and growing adoption of high-performance computing. Increasing demand for advanced logic chips, high-bandwidth memory and sophisticated semiconductor packaging is driving higher process control intensity, strengthening KLA’s growth prospects.
MKS is benefiting from rising AI-related investment across semiconductor and advanced packaging markets, with demand broadening through memory, logic, advanced PCBs, photonics, and chemistry equipment. Strong demand for datacom testing solutions and expanding manufacturing capacity further strengthens MKSI’s long-term growth prospects. In second-quarter 2026, photonics and optics gained momentum in lithography, metrology and inspection, while datacom benefited from communications testing for AI data centers.
AEIS Share Price Performance, Valuation and Estimates
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 19.7X, higher than the Computer & Technology sector’s 19X.
AEIS Valuation
Image Source: Zacks Investment Research
For 2026, the Zacks Consensus Estimate for earnings is pegged at $11.21 per share, which has been unchanged over the past 30 days. The figure implies a year-over-year increase of 74.88%.
Advanced Energy Industries, Inc. Price and Consensus
View the Zacks #1 Rank List
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AEIS Rides on Strong Data Center Demand: Can It Outpace KLA & MKS?
Key Takeaways
Advanced Energy (AEIS - Free Report) is benefiting from robust demand for precision power solutions, driven by accelerating investments in artificial intelligence (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 competitive position against KLA (KLAC - Free Report) and MKS (MKSI - Free Report) 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.
The company’s expanding portfolio has been noteworthy. AEIS recently introduced three new M-CRPS power supplies offering 3200W and 3600W output capacities for AI data centers, networking and telecommunications applications. The OCP-compliant solutions deliver power densities exceeding 100 W per cubic inch, supporting increasingly demanding AI infrastructure requirements. Featuring advanced cybersecurity capabilities, high efficiency and improved thermal performance, the new products are designed to support next-generation CPU and GPU workloads while simplifying system integration and accelerating deployment.
AEIS’s expanding portfolio and strong growth across the data center computing market are expected to boost top-line growth and position it favorably against KLA and MKS. For the third quarter of 2026, Advanced Energy expects revenues of $640 million, plus or minus $20 million.
AEIS Faces Stiff Competition
The company is facing stiff competition from companies like KLA and MKS. Both companies are expanding their footprint in the data center space.
KLAC is benefiting from robust data center demand, driven by accelerating AI infrastructure investments and growing adoption of high-performance computing. Increasing demand for advanced logic chips, high-bandwidth memory and sophisticated semiconductor packaging is driving higher process control intensity, strengthening KLA’s growth prospects.
MKS is benefiting from rising AI-related investment across semiconductor and advanced packaging markets, with demand broadening through memory, logic, advanced PCBs, photonics, and chemistry equipment. Strong demand for datacom testing solutions and expanding manufacturing capacity further strengthens MKSI’s long-term growth prospects. In second-quarter 2026, photonics and optics gained momentum in lithography, metrology and inspection, while datacom benefited from communications testing for AI data centers.
AEIS Share Price Performance, Valuation and Estimates
Advanced Energy shares have gained 11.2% in the year-to-date period compared with the Zacks Computer & Technology sector’s increase of 14.9% and the Zacks Semiconductor Equipment - Wafer Fabrication industry’s growth of 47.2%.
AEIS Stock Performance
Image Source: Zacks Investment Research
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 19.7X, higher than the Computer & Technology sector’s 19X.
AEIS Valuation
Image Source: Zacks Investment Research
For 2026, the Zacks Consensus Estimate for earnings is pegged at $11.21 per share, which has been unchanged over the past 30 days. The figure implies a year-over-year increase of 74.88%.
Advanced Energy Industries, Inc. Price and Consensus
Advanced Energy Industries, Inc. price-consensus-chart | Advanced Energy Industries, Inc. Quote
Advanced Energy currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.