AEM Lifts FY2026 Outlook as AI/HPC Demand Powers Earnings Upswing

An update from AEM Holdings Ltd. ( (SG:AWX) ) is now available.

AEM Holdings reported a 35.8% year-on-year rise in first-quarter FY2026 revenue to S$116.9 million, driven mainly by high-volume production deployments for a fabless AI/HPC customer and recovering demand from a major PC/foundry client. Profit before tax surged to S$17.8 million, expanding the PBT margin to 15.2%, as a richer product mix, higher utilisation and greater contribution from Test Cell Solutions lifted profitability.

Test Cell Solutions revenue jumped 72% to S$88.1 million and now accounts for more than three-quarters of group sales, supported by customer adoption of AEM’s proprietary PiXL thermal technology for testing power-dense AI devices. In contrast, contract manufacturing revenue declined 15.7% on softer oil and gas demand, though management is repositioning this segment to support internal semiconductor equipment ramps and improve margins.

AEM’s balance sheet has strengthened markedly, with a net cash position of S$56.5 million, low leverage and rising net asset value following strong operating cash flow in FY2025, giving it capacity to fund its five-pillar growth strategy and ongoing R&D. The company has also reinstated dividends, underscoring improved financial flexibility and offering a positive signal to shareholders.

Strategically, AEM raised its FY2026 revenue guidance by about 20% to S$550 million–S$600 million, reflecting stronger visibility from both AI/HPC and PC/foundry customers. A new partnership with ASE, the world’s largest OSAT provider, is expected to open doors to hyperscaler clients and underpin deployments from late 2026, deepening AEM’s role in next-generation AI/HPC test solutions.

Management positions the current upswing as a structural earnings upcycle tied to AI- and HPC-driven complexity rather than a typical semiconductor rebound, with recurring high-value revenue expected from device-specific test configurables and collaterals refreshed each product cycle. AEM estimates its serviceable available market at US$3 billion today, rising to US$4.5 billion by 2028, as it broadens its customer base across PC/foundry, AI/HPC, memory and OSAT segments.

The most recent analyst rating on (SG:AWX) stock is a Buy with a S$8.90 price target. To see the full list of analyst forecasts on AEM Holdings Ltd. stock, see the SG:AWX Stock Forecast page.

More about AEM Holdings Ltd.

AEM Holdings Ltd. is a Singapore-based global provider of semiconductor test and handling solutions, with a core focus on high-parallel test cell systems and advanced thermal management technologies. The group serves key markets including AI and high-performance computing, PC and foundry customers, memory manufacturers, and outsourced semiconductor assembly and test providers.

Average Trading Volume: 7,847,777

Technical Sentiment Signal: Buy

Current Market Cap: S$2.4B

For a thorough assessment of AWX stock, go to TipRanks’ Stock Analysis page.