Aehr Test Systems has surged 72.2% in a month on record bookings and AI-driven demand — but the stock now trades at nearly 25 times forward sales.
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Aehr Test Systems soars 72% on record AI chip testing backlog
Aehr Test Systems surged 72.2% in a month to $131.17 after record bookings of $60.7 million and a $100.6 million backlog showed AI-driven test demand.
Zacks Research upgraded the stock from hold to strong buy on July 17, while Lake Street Capital reiterated a buy rating with a $110 price target and Craig Hallum reaffirmed a buy with a $125 target, according to MarketBeat data.
The rally outpaced the electronics measuring instruments industry, which gained 7.4%, and the S&P 500, which rose 2.9%. Teradyne advanced 11.3% over the same period, while Cohu was flat. Analysts project fiscal 2027 revenue of $140.2 million, up 180.4%, with EPS of 70 cents versus 3 cents a year earlier.
The stock's 24.62 times forward sales multiple — versus the industry average of 6.32 times — leaves little room for execution missteps as the company converts its backlog into revenue while expanding capacity to meet AI processor, silicon photonics and power semiconductor demand.
AI Demand Drives a Broadening Growth Story
The company's lead hyperscale customer is ramping AI processors and increasing its need for wafer-level and package-level burn-in systems. Management expects this customer's system purchases and WaferPak requirements to increase significantly over the next several years. In early August, Aehr received a $22 million follow-on production order from this customer for wafer-level burn-in systems used with advanced AI training and inference processors.
Silicon photonics is emerging as a major new opportunity as AI data centers adopt optical I/O and high-speed interconnects. Aehr received a follow-on production order from its lead silicon photonics customer for a fully automated FOX-XP multi-wafer burn-in system, scheduled to ship in the first half of 2027. The company also received more than $8 million of silicon carbide orders in the month before its July results, including orders tied to automotive programs. Management also expects renewed gallium nitride and silicon carbide demand from AI data-center power infrastructure.
Aehr is pursuing wafer-level burn-in opportunities in memory, including NAND flash and potential high-bandwidth memory applications, working with multiple memory suppliers as they prepare additional capacity.
Premium Valuation Raises the Bar
Aehr holds $116.4 million in cash as of May 29, 2026, providing a cushion for capacity expansion and working capital needs. But the stock's sharp run-up — up more than 400% this year — has pushed its forward sales multiple to 24.62 times, well above the industry average of 6.32 times and its three-year median of 6.05 times. Teradyne trades at 10.50 times forward sales, while Cohu trades at 3.61 times.
The company depends on a relatively small group of large customers, with its lead hyperscale AI customer playing an outsized role. Delays in production ramps or shifts in customer spending could make results volatile. Insider selling has also picked up: Director Howard T. Slayen sold 20,000 shares at $108.30 on Aug. 4, and VP Alistair N. Sporck sold 2,000 shares at $100.96 the same day.
Despite these risks, the strong growth outlook and favorable estimate trends support a Zacks Rank #1 (Strong Buy) for AEHR. The consensus rating across analysts is Buy, with an average price target of $117.50. The company has topped earnings estimates in three of the past four quarters, delivering an average earnings surprise of 321.9%.
This article is for informational purposes only and does not constitute investment advice.
