Shares of semiconductor testing company Aehr Test Systems (AEHR +6.85%) have rocketed 37.5% on Monday as of 12:22 PM ET.
Aehr makes test-and-burn-in equipment that enables chipmakers to "stress test" their semiconductors while the chips are still on the wafer or in a package, before the chips are built into completed systems.
While Aehr's equipment has traditionally been used for chips in high-intensity applications like use in industry and electric vehicles (EVs), the huge heat dissipation needs of artificial intelligence (AI) chips has created a brand-new market for Aehr's equipment.
Today, Aehr announced a follow-on order by a large AI hyperscaler, stoking AI-fueled enthusiasm for the stock.
NASDAQ: AEHR
Key Data Points
An unnamed hyperscaler buys six more test systems
Today, Aehr issued a press release disclosing that its large AI hyperscaler customer put in an order for six additional Sonoma test systems. CEO Gayn Erickson said:
We are very pleased that this leading hyperscaler has increased its forecast and placed additional volume production orders for our Sonoma systems so soon after last month's order. These orders demonstrate both the value of our ultra-high-power system for volume production burn-in of AI processors and the growing relationships we are building with customers at the forefront of the AI market. This customer is one of the premier large-scale data center providers developing its own AI processors, and they have already indicated plans to expand capacity for this initial device and add additional AI devices over the next year. We are also engaged with them on future generations of processors to ensure we can support their long-term production needs.
Aehr first indicated AI chip companies were interested in its testing systems about a year ago, with the first order from a hyperscaler customer for its in-house AI chips coming last September.
Despite some lackluster financials since then, the EV market remaining in a slump, it looks as though this AI hyperscaler customer is ramping up orders in volume. On July 22, Aehr noted this company had placed an order for eight additional systems. Just a month later, this customer has put in another order for six more systems.
Image source: Getty Images.
Aehr, a boom-or-bust stock, is currently booming
Aehr's financials were disappointing over its past fiscal year ended May 30, with revenue down about 10% and a small loss per share. However, this was during a year in which EV chip customers, who had been Aehr's core market, scaled back their investments, while Aehr's AI customer was basically in the low-volume testing phase.
If the EV market recovers, the addition of this new high-volume AI hyperscaler customer should make for a much better year or years. Notably, Aehr's stock is still down more than 50% from the all-time high set back in 2023, even after today's monster gain.
