Advanced Energy Industries (AEIS) Surges 11.7% on Q3 Earnings Beat and AI-Driven Growth Momentum

Summary
• Advanced Energy Industries (AEIS) rockets 11.7% intraday to $217.96, surpassing its 52-week high of $229.675.
• Q3 non-GAAP EPS of $1.74 beats estimates by 18.37%, with Data Center Computing revenue surging 113% YoY.
• Cash flow from operations jumps 123% to $79 million, signaling operational resilience.

Advanced Energy’s stock is in a tailwind after a blockbuster Q3 earnings report, driven by AI data center demand and margin expansion. The stock’s 11.7% rally reflects investor optimism about its role in the AI infrastructure boom, despite a short-term bearish technical pattern. Sector peers like Eaton (ETN) also rally, hinting at broader industry tailwinds.

Q3 Earnings and AI Demand Fuel Advanced Energy’s Surge
Advanced Energy’s 11.7% intraday surge stems from a Q3 earnings report that exceeded expectations on all fronts. Non-GAAP EPS of $1.74 outperformed the Zacks Consensus by 18.37%, while Data Center Computing revenue surged 113% YoY, reflecting robust demand for AI infrastructure. CEO Steve Kelley highlighted 'increased demand for AI data center solutions' as the key driver. The stock’s rally aligns with broader industry trends, as AI’s energy-hungry data centers require advanced power solutions. Strong cash flow growth (123% YoY to $79 million) and gross margin improvement (37.6% vs. 35.8% prior year) further validate operational strength.

Electrical Equipment Sector Gains Momentum Amid AI Infrastructure Investments
The electrical equipment sector is rallying as AI infrastructure spending accelerates. Eaton (ETN), the sector leader, surged 4.11% intraday, reflecting shared tailwinds. Advanced Energy’s AI-driven growth mirrors broader industry trends, where companies like Siemens Energy and PTT are investing $500B in U.S. AI infrastructure over four years. Transformer and power distribution demand is surging, with data centers accounting for 160% projected power consumption growth by 2030. Advanced Energy’s niche in precision power solutions positions it to outperform peers in this high-growth segment.

Bullish Setup: AEIS20251121C230 and AEIS20251121C220 for AI-Driven Momentum
• Technical Indicators:
- 200-day MA: $133.79 (well below current price)
- RSI: 54.87 (neutral to overbought)
- MACD: 8.42 (bullish divergence from signal line 9.09)
- Bollinger Bands: Price at $217.96 vs. upper band $216.04 (overshooting)

Trading Setup: AEIS is in a long-term bullish trend but faces short-term bearish pressure. Key resistance at $229.675 (52-week high) and support at $193.79 (Bollinger middle band). A break above $229.675 could trigger a retest of $230, while a pullback to $205.78 (intraday low) may offer a low-risk entry. Sector leader Eaton (ETN) gaining 4.11% suggests industry-wide optimism.

Top Options:
• AEIS20251121C230
- Strike: $230, Expiry: 2025-11-21
- IV: 45.66% (moderate), Leverage: 49.70%, Delta: 0.328 (moderate sensitivity), Theta: -0.3826 (high time decay), Gamma: 0.0168 (high sensitivity to price moves), Turnover: $26,250
- Payoff: At 5% upside (ST = $229.36), payoff = max(0, $229.36 - $230) = $0.36 per contract. Ideal for aggressive bulls expecting a breakout.
• AEIS20251121C220
- Strike: $220, Expiry: 2025-11-21
- IV: 43.28% (moderate), Leverage: 28.40%, Delta: 0.500 (balanced sensitivity), Theta: -0.4717 (high time decay), Gamma: 0.0195 (high sensitivity), Turnover: $25,670
- Payoff: At 5% upside (ST = $229.36), payoff = max(0, $229.36 - $220) = $9.36 per contract. Offers a safer entry with higher intrinsic value.

Action: Aggressive bulls may consider AEIS20251121C230 for a breakout above $229.675, while balanced traders should target AEIS20251121C220 for a retest of $220. Both contracts benefit from high gamma and moderate IV, aligning with AI-driven momentum.

Backtest Advanced Energy Industries Stock Performance
I attempted to complete the event study exactly as requested, but the back-test engine reported that there were no sessions in 2022-to-date where AEIS closed ≥ +12 % versus the prior day. Because the event list was empty, the statistical routine could not compute returns and raised the “division-by-zero” error you saw.How would you like to proceed?1. Lower the surge threshold (e.g. +10 %, +8 %, +5 %) to capture more events.2. Extend the historical window further back (for example from 2010) while keeping the +12 % filter.3. Combine both: a longer window and a slightly lower threshold.4. Stop here.Let me know which option (or any other adjustment) you prefer, and I’ll rerun the analysis accordingly.

Advanced Energy’s AI-Driven Rally: Secure Gains or Ride the Wave?
Advanced Energy’s 11.7% surge is a testament to its AI-driven growth and operational resilience, but technical indicators suggest caution. The stock’s long-term bullish trend (200-day MA at $133.79) contrasts with a short-term bearish pattern. Investors should monitor the $229.675 resistance level and $193.79 support. Sector leader Eaton (ETN) gaining 4.11% reinforces industry-wide optimism. For options traders, AEIS20251121C220 and AEIS20251121C230 offer leveraged exposure to a potential breakout. Act now: Secure profits if $229.675 breaks, or hold for a retest of $220. AI infrastructure spending will likely keep this rally alive.