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Aehr Test (AEHR)
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Aehr Test Systems (AEHR) AI Stock Analysis

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AEHR

Aehr Test Systems

(NASDAQ:AEHR)

Rating:63Neutral
Price Target:
$23.50
▲(12.39%Upside)
The overall stock score reflects a balance between the company's strong technical momentum and strategic shifts highlighted in the earnings call, versus the significant financial challenges indicated in the financial statements. While the technical indicators are strong, profitability and cash flow issues pose a risk, balanced slightly by strategic advancements in AI.
Positive Factors
Acquisitions
The acquisition of Incal Technology will expand Aehr’s product portfolio, representing a growth opportunity in AI accelerators, GPUs, and high-performance computing processors.
Business Diversification
Aehr is transitioning away from a SiC-centric company and gaining traction in applying its WBLI technology in other applications, namely AI processors.
Product Adoption
The company announced the first adoption of its wafer level burn-in (WLBI) for an AI processor, offering a significant value proposition for AI processor manufacturers.
Negative Factors
Earnings Expectations
Aehr missed fourth-quarter expectations considerably and held back on providing guidance for fiscal 2026.
Geopolitical Risks
There is uncertainty related to the U.S. tariff policy, which could have near-term effects on customer orders and supply chain deliveries.
Market Visibility
Bookings in the quarter were $11.1 million, representing a book-to-bill ratio of 0.79, highlighting the lack of visibility in the business as new markets are still being evaluated.

Aehr Test Systems (AEHR) vs. SPDR S&P 500 ETF (SPY)

Aehr Test Systems Business Overview & Revenue Model

Company DescriptionAehr Test Systems provides test systems for burning-in and testing logic, optical, and memory integrated circuits worldwide. It offers products, such as the ABTS and FOX-P families of test and burn-in systems and FOX WaferPak Aligner, FOX-XP WaferPak Contactor, FOX DiePak Carrier, and FOX DiePak Loader. The ABTS system is used in production and qualification testing of packaged parts for lower power and higher power logic devices, as well as various common types of memory devices. The FOX-XP and FOX-NP systems are wafer contact and singulated die/module test and burn-in systems used for burn-in and functional test of complex devices, such as memories, digital signal processors, microprocessors, microcontrollers, systems-on-a-chip, and integrated optical devices. The FOX-CP system is a single-wafer compact test and reliability verification solution for logic, memory, and photonic devices. The WaferPak Contactor contains a unique full wafer probe card capable of testing wafers up to 300mm that enables IC manufacturers to perform test and burn-in of full wafers on Aehr Test FOX systems. The DiePak Carrier is a reusable, temporary package that enables IC manufacturers to perform final test and burn-in of bare die and modules. Aehr Test Systems was incorporated in 1977 and is headquartered in Fremont, California.
How the Company Makes MoneyAehr Test Systems generates revenue primarily through the sale of its test and burn-in equipment to semiconductor manufacturers and other companies involved in the electronics supply chain. The company's key revenue streams include the sale of its proprietary testing systems, such as the FOX-XP and FOX-NP platforms, which are designed for high-volume production and reliability testing. Additionally, Aehr Test Systems offers service and support contracts, as well as consumables and upgrade kits for its equipment, contributing to recurring revenue. Significant partnerships with leading semiconductor companies enhance its market presence and contribute to its earnings, while ongoing product innovation helps maintain its competitive edge.

Aehr Test Systems Key Performance Indicators (KPIs)

Any
Any
Backlog
Backlog
Represents the value of pending orders, offering a glimpse into future revenue streams and the strength of product demand.
Chart InsightsAehr Test Systems' backlog has shown volatility, with significant fluctuations over recent quarters. The latest earnings call reveals a strategic pivot towards AI processors, now a major revenue driver, which may stabilize backlog levels. Despite a revenue decline and tariff uncertainties, the company is optimistic about future growth in AI and other markets. The development of a new wafer level burn-in system for AI processors marks a technological leap, potentially boosting future orders and backlog stability as AI demand increases.
Data provided by:Main Street Data

Aehr Test Systems Earnings Call Summary

Earnings Call Date:Jul 08, 2025
(Q4-2025)
|
% Change Since: 37.84%|
Next Earnings Date:Oct 02, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant achievements in expanding into new markets, particularly AI processors, which accounted for a substantial portion of the revenue. However, there were notable challenges such as a decline in overall revenue and gross margin, as well as tariff-related uncertainties and restructuring costs.
Q4-2025 Updates
Positive Updates
AI Processor Revenue Surge
AI processors accounted for over 35% of revenue in fiscal 2025, a significant increase from 0% the previous year.
Expansion in New Markets
Significant progress in diversifying into markets such as gallium nitride power semiconductors, data storage devices, and silicon photonics integrated circuits.
Wafer Level Burn-In System Milestone
Completed development, validation, shipment, and customer acceptance of the first-ever wafer level burn-in system for AI processors.
Record Bookings
Annual bookings in fiscal 2025 were $61.1 million, up over 24% compared to $49 million in the prior fiscal year.
Negative Updates
Revenue Decline
Revenue decreased by 11% year-over-year to $59 million.
Gross Margin Decline
Non-GAAP gross margin for the year was 44%, down from 49.6% the previous year.
Impact of Tariff Uncertainty
Tariff-related uncertainties caused delays in shipments and contributed to a cautious approach in providing guidance for fiscal 2026.
Restructuring Charges
One-time restructuring charges of $864,000 were incurred related to the closure of the InCal facility.
Company Guidance
During Aehr Test Systems' fiscal 2025 fourth quarter and full-year earnings call, the company highlighted significant diversification in its revenue streams and provided insights into their market expansion strategy. They reported a notable shift in revenue composition, with silicon carbide wafer level burn-in dropping from over 90% in fiscal 2024 to under 40% in fiscal 2025. Conversely, artificial intelligence (AI) processors, which contributed 0% in the previous year, now accounted for over 35% of their revenue. Aehr Test Systems also emphasized progress in the gallium nitride (GaN) power semiconductors and silicon photonics markets. The company completed the development and shipment of the first-ever wafer level burn-in system for AI processors, marking a major technological advancement. They noted that AI processors require extensive burn-in testing to ensure high reliability, highlighting that the new FOX XP system can test multiple AI processor wafers simultaneously. Despite the challenges posed by tariff uncertainties affecting the timing of orders, Aehr Test Systems is optimistic about continued growth across all market segments, particularly in AI, anticipating further order growth in fiscal 2026.

Aehr Test Systems Financial Statement Overview

Summary
Aehr Test Systems is facing financial challenges with declining revenue and profitability, coupled with negative cash flows. Despite a strong equity base, operational inefficiencies and cash flow issues are significant concerns.
Income Statement
55
Neutral
The company's revenue has shown inconsistent growth with a recent decline in total revenue from $66.2M to $58.97M. The gross profit margin decreased from 49.1% to 40.6%, indicating reduced efficiency in production. The net profit margin turned negative at -6.6%, compared to the previous year's 50%, reflecting significant profitability challenges. The EBIT and EBITDA margins also turned negative, highlighting operational inefficiencies.
Balance Sheet
65
Positive
Aehr Test Systems maintains a solid equity base with an equity ratio of 82.7%. However, the debt-to-equity ratio increased slightly due to rising debt levels, though it remains manageable. The return on equity turned negative, indicating recent profitability issues. The company has a strong cash position, supporting financial stability despite recent losses.
Cash Flow
40
Negative
The cash flow situation is concerning, with both operating and free cash flows turning negative. This indicates challenges in generating cash from operations, reflected in a negative free cash flow growth rate of -1,336%. The operating cash flow to net income ratio is negative, further underscoring cash generation issues.
Breakdown
Income Statement
Total Revenue
Gross Profit
EBITDA
Net Income
Balance Sheet
Total Assets
Cash, Cash Equivalents and Short-Term Investments
Total Debt
Total Liabilities
Stockholders Equity
Cash Flow
Free Cash Flow
Operating Cash Flow
Investing Cash Flow
Financing Cash Flow

Aehr Test Systems Technical Analysis

Technical Analysis Sentiment
Positive
Last Price20.91
Price Trends
50DMA
12.93
Positive
100DMA
10.70
Positive
200DMA
11.79
Positive
Market Momentum
MACD
2.37
Negative
RSI
71.25
Negative
STOCH
82.02
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AEHR, the sentiment is Positive. The current price of 20.91 is above the 20-day moving average (MA) of 16.28, above the 50-day MA of 12.93, and above the 200-day MA of 11.79, indicating a bullish trend. The MACD of 2.37 indicates Negative momentum. The RSI at 71.25 is Negative, neither overbought nor oversold. The STOCH value of 82.02 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AEHR.

Aehr Test Systems Risk Analysis

Aehr Test Systems disclosed 21 risk factors in its most recent earnings report. Aehr Test Systems reported the most risks in the "Tech & Innovation" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Aehr Test Systems Peers Comparison

Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
67
Neutral
$305.56M21.0223.09%6.33%-9.22%-13.57%
63
Neutral
$622.52M19.55-3.34%-10.95%-111.40%
63
Neutral
$34.94B5.14-11.21%1.86%5.61%-19.33%
61
Neutral
$1.64B-26.43%-16.95%-2.47%
60
Neutral
$371.92M-1369.57%14.68%20.20%
59
Neutral
$344.48M-4.71%-4.77%84.82%
54
Neutral
$287.55M-24.31%-12.13%-39.21%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
AEHR
Aehr Test Systems
20.91
2.25
12.06%
NVEC
NVE
63.17
-16.97
-21.18%
VLN
Valens
2.72
0.52
23.64%
NVTS
Navitas Semiconductor
8.56
4.98
139.11%
AIP
Arteris
9.45
1.39
17.25%
XPER
Xperi Inc
7.54
-0.44
-5.51%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 24, 2025