The Next Breakout Semiconductor Stock? Aehr Test Systems Soars 20% On Strong Revenue Growth, Updated Guidance

Aehr Test Systems AEHR shares soared more than 25% early Wednesday after the company reported preliminary earnings results, showing substantial revenue growth and updated guidance. The company, which tests semiconductor products across various industries, reported $16.6 million in revenue for Q4, higher than what analysts were expecting.

Throughout the last year or so, semiconductor stocks have been favorites among investors, with stocks like NVIDIA Corp NVDA, Super Micro Computer SMCI and others more than doubling in price. Now, stocks like Aehr, appear to be joining in on the rally, capitalizing on rising demand for chips amid an ongoing artificial intelligence boom.

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Analysts were expecting Aehr's Q4 revenue to come in around $15.5 million, so the company's reported $16.6 million is a substantial beat. Additionally, the company updated its full-year 2024 guidance to $66.2 million. Currently the stock trades at around a $350 million market cap, or about five times expected revenue for the year.

What Does Aehr Do? Aehr tests semiconductors for automobiles, mobile phones and other devices. Because more and more electronic devices require advanced chips and semiconductors, Aehr's services are crucial for companies implementing state-of-the-art technology into their products.

Quoted: "Although we saw customer pushouts of our products for silicon carbide devices due to slowing electric vehicle (EV) demand in the second half of our fiscal year, we still achieved another record year for annual revenue for Aehr," said Gayn Erickson, president and CEO of Aehr Test Systems.