Aehr Test Systems
Aehr Test Systems

Shares of Aehr Test Systems surged 38.12% Wednesday morning, climbing to $99.46 as of 10:09 a.m. EDT, after the semiconductor test equipment maker reported fiscal fourth-quarter results that topped Wall Street estimates and issued fiscal 2027 revenue guidance that far exceeded analyst expectations.

The stock's gain of $27.45 on the day reflects investor enthusiasm following Tuesday's earnings release, in which the Fremont, California-based company detailed a dramatic acceleration in bookings tied to artificial intelligence infrastructure demand, alongside a full-year revenue forecast that implies significant growth over the coming fiscal year.

Guidance Well Above Analyst Expectations

Aehr forecast fiscal 2027 revenue of $130 million to $150 million, dramatically higher than the analyst consensus estimate of $85.13 million heading into the report. The outlook implies revenue growth of roughly 2.6 to 3 times compared with fiscal 2026, a scale of projected expansion that helped drive Wednesday's sharp rally in the stock.

Management indicated that the guidance could move even higher if additional customer orders are secured, pointing to the company's record backlog as support for that potential upside. Aehr also said it does not anticipate manufacturing capacity constraints even if revenue reaches the top end of its guidance range, and forecast a non-GAAP pre-tax margin of 18% to 22% for fiscal 2027.

Fourth-Quarter Bookings Surge

The company's fourth-quarter results showed a dramatic increase in new business. Bookings jumped more than fivefold to $60.7 million, compared with $11.1 million during the same period a year earlier, driven by demand for the company's Sonoma and FOX burn-in systems, WaferPaks, module boards, and testing applications tied to AI processors and silicon photonics.

Aehr ended the fiscal year with a record backlog of $80.6 million. Including approximately $20 million in additional orders received after the fiscal year closed, the company's effective backlog rose to about $100.6 million, providing significant visibility into future revenue as the new fiscal year begins.

A Rapidly Diversifying Business

Aehr highlighted a significant shift in the composition of its revenue base during the earnings release. More than 95% of the company's revenue had previously been tied to silicon carbide applications used in electric vehicles, but nearly 95% of fiscal 2026 revenue came from markets outside that segment, reflecting a rapid diversification into AI-related testing applications.

Looking ahead, company management said it expects AI-related testing to account for around 70% of fiscal 2027 revenue, with silicon photonics contributing an additional 15% to 20%. Power semiconductors and other product lines are expected to make up the remainder of the company's revenue base. Aehr does not anticipate any meaningful memory-related revenue, even if the company reaches the high end of its fiscal 2027 guidance range.

CEO Highlights Expanding Customer Relationships

Aehr Chief Executive Gayn Erickson pointed to the strength and breadth of the company's backlog as a key driver of confidence in the updated guidance.

Erickson said the backlog provides the company "substantial visibility," and pointed to "multiple customers entering or expanding production" as evidence of sustained demand across Aehr's core markets.

The company also noted continued momentum in its silicon carbide business, adding its first silicon carbide customer in Taiwan and securing approximately $8 million in new silicon carbide wafer-level burn-in orders over the past month, which the company attributed to accelerating global electric vehicle programs. During the quarter, Aehr also completed more than 12 gallium nitride, or GaN, WaferPak designs that are now undergoing customer evaluations.

Strengthening Financial Position

Aehr's balance sheet has improved significantly, aided in part by capital raised through equity issuance. The company finished the fiscal year with $116.5 million in cash, cash equivalents and restricted cash, after bringing in $97.4 million net from public stock sales during the period. Shares outstanding climbed 8.7% compared with the prior year as a result of that capital raise.

Fourth-quarter unaudited figures showed a non-GAAP gross margin of 44.7%, a notable improvement from 34.7% during the same period a year earlier. Adjusted net income for the quarter came in at $3.6 million, or 11 cents per share.

Continued Momentum From Recent Orders

Wednesday's earnings-driven rally builds on positive momentum the stock had already been showing in recent sessions. Earlier this month, Aehr shares climbed after the company announced a follow-on production order from its lead silicon photonics customer for a fully automated FOX-XP wafer-level burn-in system. That order, covering a multi-wafer configuration capable of testing up to nine 300mm wafers simultaneously, is intended to support high-volume production burn-in of silicon photonics devices used in AI optical interconnect and hyperscale data center infrastructure.

Aehr CEO Erickson commented on that earlier order as well, describing it as further validation of the company's strategic positioning within the AI infrastructure supply chain.

"The successful installation and production qualification of our first fully-automated system with this customer represents another important milestone in our long-term relationship with them," Erickson said at the time, adding that the company was "very pleased to receive this additional follow-on production order early in our new fiscal year."

A Volatile Stock With a Dramatic Run

Aehr's stock has experienced substantial volatility over the past year, reflecting the market's shifting views on the company's growth trajectory. Shares have traded between $12.19 and $126.62 over the trailing 52-week period, and the stock posted a 12-month performance gain of more than 410% as of earlier this month, even before Wednesday's rally.

The stock had pulled back sharply in recent weeks, sliding from the mid-$110s in late June down toward the low $70s by mid-July, before Wednesday's earnings report reignited significant buying interest. Despite the strong fundamentals outlined in the earnings release, the company continues to operate at a net loss on a GAAP basis, with quarterly figures showing a net loss of roughly $3.2 million on $10.31 million in revenue prior to the latest results, underscoring that Aehr remains a company still investing heavily in growth rather than generating consistent profitability.

With its backlog now covering a substantial portion of the midpoint of its fiscal 2027 revenue guidance, Aehr's next major test will be converting that pipeline into delivered systems and recognized revenue. Management specifically flagged that most of a previously announced $41 million order is expected to ship during the company's fiscal second quarter, a milestone that analysts and investors are likely to watch closely as an early indicator of whether the company can meet the ambitious growth targets outlined in Tuesday's earnings release.

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