Shares in Aehr Test Systems (AEHR 12.21%) declined by almost 15% by 1 p.m. today, only to recover some lost ground later in the day. The move comes as part of a broader sell-off in artificial intelligence (AI)- related stocks, driven by the market's displeasure with Advanced Micro Devices' (AMD)guidance for a sequential sales decline in its first quarter of 2026.
Does the sell-off make sense?
To be clear, AMD's guidance implies 32% year-over-year growth, but the market focused on the potential 5% sequential decline as some sort of indication of a slowdown in AI infrastructure spending. That matters to Aehr Test Systems as the company is pivoting toward wafer-level burn-in (WLBI) test solutions for customers developing AI processors, after its core market (WLBI for a silicon carbide market dominated by electric vehicle-related spending) slowed markedly.
NASDAQ: AEHR
Key Data Points
That said, the AMD sell-off looks like a classic case of the market getting jittery and finding an excuse to sell stock. It's all the more puzzling considering that the day before, Teradyne (TER 4.74%), a company that also makes semiconductor test equipment, said that its fourth quarter sales and earnings came in ahead of its guidance range, "fueled by AI-related demand in compute, networking and memory within our Semi Test business.'"
Where next for Aehr Tet Systems
Teradyne is an interesting comparison because its testing solutions (used when semiconductor companies start developing and ramping production) tend to be earlier in the cycle than Aehr's systems, which test the quality and reliability of wafer production.
Image source: Getty Images.
As such, the strengthening momentum in Teradyne's business indicates growth down the line for Aehr. If the sell-off persists, it could create an excellent buying opportunity.
