Aehr Test Systems (AEHR 11.40%) stock rose by a whopping 27% in January, according to data provided by S&P Global Market Intelligence. Moreover, despite a recent sell-off off it remains up more than 15% on the year as I write. The move comes after the company's recent results, management commentary, and peer reporting confirm that Aehr's pivot toward the AI processor market is set to pay off.
Aehr Test Systems' pivot
The company makes test equipment that helps ensure the quality and reliability of semiconductors. It's a critical issue for its customers because chip failures can cause significant problems, not least for electric vehicles (EVs) that can suddenly fail. The EV market (silicon carbide, or SiC chips) is the company's traditional core market, and its sales boomed when automakers accelerated their EV development plans during lockdowns, only to reverse course when disappointing sales led to a scaling back of ambitions.
AEHR Revenue (TTM) data by YCharts
That said, EVs aren't the only industry that hates unsuspected failures, and Aehr has pivoted toward burn-in test systems for customers developing AI processors.
Aehr Test Systems is about to take off
Last year, the company acquired an undisclosed lead customer, which management describes as a "world-leading hyperscaler" , and has already won orders from it. However, the big step-up in orders is expected to occur this financial year.
For reference, Aehr reported its second-quarter 2026 earnings (ended Nov. 28) in January, so when management discloses that it expects bookings of $60 million to $80 million in the second half of the year, it's talking about the period from the end of November to the end of May.
Image source: Getty Images.
The bookings expectation is significant and many multiples higher than the $6.2 million in bookings reported in the second quarter. In addition, at its midpoint, it's about 1.5 times Wall Street's revenue expectations for Aehr in 2026, namely $47 million.
Where next for Aehr Test Systems
Now that CEO Gayn Erickson has given a figure, investors will expect Aehr to reach it and then announce further order growth. Meanwhile, its EV market will surely stabilize and start to grow in the future, because despite EV sales not panning out as the industry hoped, EVs remain a growth part of the auto market, and lower interest rates will surely boost its prospects. Combined with nascent but accelerating growth from AI processors, Aehr has a bright future.
