Shares in Aehr Take a look at Programs (AEHR -3.15%) slumped by 22.2% within the first half of 2025, in accordance with information offered by S&P International Market Intelligence. That determine could shock buyers, not least as a result of it is a lengthy, great distance from telling the entire story of a inventory that declined 56% within the first three months of 2025 solely to rise 77.4% within the final three months of the half-year.
Aehr Take a look at Programs’ wild trip in 2025
The autumn and rise of the inventory mirrors the narrative round it and its finish markets. The corporate lately reported its full-year monetary 2025 earnings. For the sake of readability, its monetary yr ends on Might 30. Going again to specializing in the primary six months of the calendar yr, Aehr began the yr with most buyers considering of it as an organization targeted on the silicon carbide (SiC) wafer-level burn-in (WLBI) market, and with good purpose, as a result of the SiC WLBI market accounted for 90% of its gross sales in its monetary yr 2024.
ON Semiconductor (ON 0.40%) has beforehand been named as a big buyer, and its gross sales slowdown has mirrored a broader slowdown within the SiC market, principally within the electrical car (EV) market. A mixture of an ongoing comparatively excessive rate of interest and a correction from a earlier growth in EV spending meant Aehr could not depend on the SiC WLBI marketplace for development in its monetary 2025.
Certainly, CEO Gayn Erickson lately outlined that SiC WLBI “made up lower than 40% of our income this fiscal ’25.” As such, the story of Aehr’s first three months was disappointing, as its EV finish marketplace for SiC WLBI tools continued to weaken.
Aehr Take a look at Programs develops new markets
The numerous turnaround within the inventory’s fortunes in 2025 occurred within the third-quarter earnings report in April, when administration introduced it was increasing into new markets and was on monitor to generate 35% of its income (later confirmed) from the substitute intelligence (AI) processor burn-in market. As well as, administration stated it had “4 prospects representing over 10% of income, and three of those are new markets,” together with WLBI of gallium nitride (GaN) semiconductor provide to the automotive market.
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Moreover, on the fourth-quarter earnings launch, Erickson stated it had secured “a serious hyperscaler” as a primary manufacturing AI buyer within the packaged half burn-in (PPBI) market.
Whereas Aehr is not naming these important prospects, a slide deck of its prospects contains names like Microsoft, Alphabet‘s Google, Nvidia, ON Semiconductor, and Infineon, amongst many others.
The place subsequent for Aehr Take a look at Programs?
Administration believes its AI finish markets are doubtlessly 3 to five occasions bigger than its conventional SiC markets, and that optimism is fueling the present inventory worth energy.
Suzanne Frey, an government at Alphabet, is a member of The Motley Idiot’s board of administrators. Lee Samaha has no place in any of the shares talked about. The Motley Idiot has positions in and recommends Alphabet, Microsoft, and Nvidia. The Motley Idiot recommends ON Semiconductor and recommends the next choices: lengthy January 2026 $395 calls on Microsoft and quick January 2026 $405 calls on Microsoft. The Motley Idiot has a disclosure coverage.
