Aehr Test Systems: An Earnings Show-Me Story, Optimistic For A Turnaround

4 weeks ago 6

Summary

Aehr Test Systems has faced significant challenges, including weak silicon carbide sales and intense competition, but remains a buy due to low valuation and potential EPS growth.
Despite a sharp underperformance since early 2024 and a disappointing Q2, AEHR is diversifying revenue streams and expanding into AI processors, which could drive future growth.
Key risks include ongoing supply chain issues, competition, and uncertainties in the silicon carbide market, but recent positive economic data from China offers hope for a turnaround.
Technically, AEHR faces resistance at $10 and bearish indicators, but a bullish response to earnings could target a long-term upside gap around $16.

AI-adjacent companies have seen mixed results in the past 9 months. Shares of NVIDIA (NVDA) essentially peaked around the middle of 2024, and the broader VanEck Semiconductors ETF (SMH) remains significantly

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.