Aehr Test Systems (AEHR, Financial) recently saw a slight decrease in its stock price, with a 0.99% drop, bringing the current price to $9.96. This movement reflects broader market conditions and investor reactions to the company's strategic shifts.
Aehr Test Systems has been diversifying its customer portfolio, shifting focus from its core silicon carbide wafer-level burn-in (SiC WLBI) solutions, which are expected to account for less than 40% of its business in the fiscal third quarter of 2025. This is a significant change from the traditional 90%, due to increasing demand from AI processors burn-in, which now contributes over 35% to the company’s revenue.
Notably, one of Aehr's primary customers in the SiC WLBI market, ON Semiconductor, along with other SiC companies, has faced challenges stemming from the struggles of the automotive electric vehicle (EV) market. However, Aehr is successfully branching out into new markets and attracting new customers. The company's CEO, Gayn Erickson, highlighted that revenue is now being driven by three major new customers: two from the AI processor sector and one from the gallium nitride (GaN) WLBI sector.
There are speculations about potential collaborations with high-profile companies such as Nvidia, especially in light of Nvidia's robust growth in the AI sector as per their latest earnings report. Navitas Semiconductor, which recently struck a deal with Nvidia, might also be among Aehr's new clientele, further enhancing its market position.
From an investment valuation perspective, Aehr Test Systems shows a Piotroski F-Score of 3, indicating potentially poor business operations, and a Beneish M-Score of 48.76, suggesting possible financial result manipulation. Despite these concerns, the Altman Z-Score of 9.21 signals strong financial health. According to GuruFocus, AEHR is considered a "Possible Value Trap, Think Twice" with a GF Value of $15.93. For more details, check the GF Value page.
Investors have responded positively to Aehr’s strategic diversification and market expansion, evident in its recent stock price trends. Despite a year-to-date decrease of 40.11%, the company’s pivot to AI processors and new customer acquisitions could set the stage for future growth.
