Aehr Just Gave a Giant Middle Finger to Wall Street After It's Massive 250% Beat (Shares Pop 13%)

As it turns out, while CPI stole the spotlight yesterday, Aehr Test Systems just reminded everyone that in no way shape or form is it just another boring-a$$ semiconductor company quietly toiling away in the background while the big boys played in the AI sandbox. 

(Source: Giphy) 

In short, Aehr Test Systems just dropped their Q1 earnings report, and let’s just say it was a solid middle finger to everyone who thought they were going to flop… or worse, forgot they even existed. ICYMI, the company reported earnings of 7 cents per share, which might not sound like much—until you realize the Wall Street geniuses only expected them to pull in a measly 2 cents. 

(Source: Investing.com) 

That’s a 250% beat, for those keeping score at home - with revenue raking in $13.12 million, absolutely body bagging the consensus estimate of $12.17 million. So yeah, Aehr Test Systems basically took a look at the analysts’ expectations, laughed, and then proceeded to blow them out of the water. As expected, the stock shot up like a rocket on Red Bull—13.36% after-hours… but still, not enough to fully regain its -46.61% YTD plunge. 

(Source: Benzinga) 

So with that, why the sudden boost in earnings? Well, aside from the fact that Aehr just made a bunch of analysts look like total clowns, they’ve apparently got some serious momentum going. Aehr locked in $16.8 million in bookings and had a backlog of $16.6 million as of August 30th. 

Plus, in addition, they’ve still got $40.8 million in cash lying around, even after they threw down $10.6 million to buy Incal Technology. That’s right—they spent a cool ten million on some new toys and still have a nice little chunk of change left for a rainy day. Not bad at all, eh? 

(Source: Aehr) 

CEO Gayn Erickson, marking his 12th year at the helm, was likely popping bottles during this massive win as the company's main moat comes from its silicon carbide burn-in test systems. And if you’re wondering what the heck that is, don’t worry—you’re not alone. Just know it’s a handy technology that the EV industry is all over for its higher breakdown in voltage and lower on-resistance efficiency - which so happens to be Aehr’s money printing machine. 

(Source: Giphy) 

On the other hand, Aehr is reportedly also looking to milk some cash out of AI processors and gallium nitride power semiconductors. Which for now, basically screams they’re trying to get in on every hot market buzzword they can find. And honestly? From the 13% pop, it may be working. 

But, but, but… before you go all-in on Aehr like it’s the next Tesla, hold your horses. Sure, Aehr is talking a big game about expanding into AI and all that futuristic nonsense, but their bread and butter—silicon carbide systems—hasn’t come without its risks lately. 

(Source: Giphy) 

As we all know, EV demand has slowed significantly over the past year, and the rest of the silicon carbide market has been limping along like me after three blown hamstrings in college. So while they’re busy diversifying, it’s going to take some time before the AI and gallium nitride cash cows really start paying off. Still, Wall Street seems to be having a love affair with Aehr right now. Between the stock jumping 13% and all the bullish vibes from our homeboys over at Stocktwits, people are acting like this company is about to cure cancer. Spoiler alert: they’re not. At least not yet.

(Source: Inside EV’s) 

As far as guidance goes (because what’s earnings without finger crossing numbers?) Aehr stuck to their original guidance, promising at least $70 million in revenue for the year. Not exactly earth-shattering, but hey, at least they’re consistent. They also reiterated that they’ll pull in net profit before taxes of at least 10% of revenue. In other words, they’re not out here trying to reinvent the wheel—they’re just doing their thing that’s been making them money. Smart. 

(Source: Nasdaq) 

So given all of this, what’s the takeaway here? Well, it’s no secret that Aehr is riding a wave of hype right now, and it’s probably not going to crash anytime soon. They’ve got their fingers in enough pies—AI, electric vehicles, gallium nitride—that there’s plenty of upside to keep investors drooling. But don’t forget: their core industry is still struggling, and it’ll take time for these new markets to really make a dent in their bottom line.

So yeah, enjoy the ride while it lasts, but maybe don’t bet the farm on Aehr just yet. They’re doing great, but let’s not pretend they’re about to become the next NVIDIA. At least not until their shiny new AI and gallium nitride ventures start paying off.

(Source: Giphy) 

In the meantime, do what you will with this information, but even though Aehr is posting some thicc and juicy numbers right now (with Wall Street eating it up)...  Whether or not they can keep up the momentum, though, is another story. As always, stay safe and stay frosty, friends! Until next time… 

P.S. While most investors are clocking out this Friday, we have one massive opportunity brewing - and from the looks of it, it’s about to POP! Click here for the details asap before it’s too late.

Stocks.News holds positions in Tesla as mentioned in the article.