Axcelis Technologies (ACLS +0.92%) specializes in ion-implantation equipment used to fabricate semiconductors, including AI chips. Wafer fabrication is a mandatory step in creating AI chips, and ion implantation is a critical part of it.
This role has made Axcelis Technologies an important part of the AI boom, and the stock's price has more than doubled year to date. While recent financial results suggest caution on the surface, a closer look reveals the opportunity.
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Axcelis Technologies is cycling out of low growth while tapping into memory
Axcelis Technologies only delivered 3% year-over-year revenue growth in Q1, which isn't really fitting for a growth stock. However, the low growth rate is due to declining sales in what it calls the "Power and General Mature" markets.
Substantial sequential growth in the memory industry helped Axcelis Technologies deliver positive year-over-year revenue growth. Memory demand has propelled Axcelis Technologies' customer support and innovation (CS&I) segment, with CEO Russell Low citing "strong sequential growth" continuing from 2025.
Axcelis Technologies' ion implantation equipment is important for AI data centers. It has competitors like Applied Materials and Lam Research, but those companies' business models are more diversified. Axcelis Technologies is practically the only pure-play ion implantation stock.
Micron Technologies' recent earnings results demonstrated that the memory industry is still hot, and that tailwind should carry over into Axcelis Technologies' Q2 results. While revenue growth is expected to be flat throughout 2026, it can change quickly in 2027 as memory demand becomes a larger share of Axcelis Technologies' total revenue. Many investors are banking on that scenario based on the stock's recent price movements.
NASDAQ: ACLS
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Axcelis Technologies and Veeco merging could lead to market share expansion
Axcelis Technologies is a pure-play ion implantation stock, but it will expand its services portfolio through the upcoming merger with Veeco Instruments (VECO +1.61%). Veeco is also on an incredible run, with its stock more than doubling year to date amid rising demand for AI infrastructure.
Veeco provides equipment for AI infrastructure that complements ion implantation, including laser annealing, which is Veeco's fastest-growing business. The company has seen an increase in orders, including $250 million in equipment orders announced in May.
Both companies are doing well with different AI-related equipment, and combining them creates significant synergies. It's a good setup for gaining more market share and commanding higher order values.
Axcelis Technologies' financial results are about to get more exciting between the AI build-out and the upcoming merger, which is expected to close in the second half of the year. If sequential growth continues to surge and slower-growing parts of the business fall deeper into the background, this current rally has room to extend.
