It surged 50% at one point during trading! AI data center demand triggers explosion in orders for Aehr Test Systems (AEHR.US), analyst's target price nearly doubles to $125.

Semiconductor test solution company Aehr Test Systems (AEHR.US) has become another company benefiting from the data center construction boom driven by artificial intelligence. The company announced its fourth quarter performance and guidance for the 2026 fiscal year on Wednesday, with quarterly bookings reaching a record high and the stock price surging more than 50%, closing up 22% on the day. The strong performance prompted Craig-Hallum analysts to reiterate their "buy" rating and nearly double their target price from the previous $68 to $125. Analysts Christian Schwab and Ben Taxdahl stated in their report on Wednesday, "The company expects significant growth in the next fiscal year, with revenue guidance for the 2027 fiscal year at $130-150 million, compared to $50 million in the 2026 fiscal year, implying a year-over-year revenue growth of approximately 160-200%, primarily driven by the adoption of AI and large-scale customers." They expect the business composition to be similar to the previous fiscal year, with the midpoint of the $140 million guidance calculated as follows: AI data center business accounts for approximately 70% of total revenue, or around $98 million (compared to about $35.5 million in the previous year); silicon photonics business accounts for about 20%, or around $28 million (compared to about $10 million in the previous year); and the rest (power semiconductors and others) account for approximately 10%, or about $14 million (compared to about $4.5 million in the previous year). The semiconductor test equipment manufacturer received orders totaling $60.7 million in the fourth quarter, reaching a historic high, with an effective backlog of orders totaling $100.6 million. The company expects full-year revenue for the 2027 fiscal year to be between $130-150 million, significantly higher than the market's general expectation of $85 million. Aehr CEO Gayn Erickson stated during the earnings call, "Based on the forecasts we are seeing from our wafer-level and package-level burn-in test platform customers, we believe there is an opportunity to further increase our revenue guidance as more orders land. Even at the $150 million revenue level, we believe capacity will not be a limiting factor." Erickson also highlighted how the company has quickly diversified its sources of income: "To illustrate the progress we have made in diversifying into more high-growth markets, just two years ago, over 95% of our business relied on the silicon carbide market for electric vehicles, whereas now, nearly 95% of revenue in the 2026 fiscal year comes from non-electric vehicle silicon carbide markets. The market for AI accelerators, CPUs, and network processors for reliability and high-volume wafer-level burn-in test screening is the fastest growing market this year, accounting for approximately 71% of total annual revenue." Craig-Hallum raised its full-year revenue estimate for the 2027 fiscal year from $80 million to $131.7 million, while also significantly increasing its earnings per share forecast from $0.20 to $0.74 (more than doubling). Other semiconductor test companies had mixed performance on Wednesday: Cohu (COHU.US) rose slightly by 0.7%, while Teradyne (TER.US) fell by 2.5%.