Aehr Test Systems Stock Surges on Major Customer Orders, Despite Financial Concerns

Aehr Test Systems (AEHR) stock surged 41.47% after a major data center hyperscaler customer placed an order for eight high-power systems for AI processor testing and burn-in. This move represents AEHR's diversification into AI technology, moving beyond its traditional focus on silicon carbide (SiC) wafer-level burn-in test equipment. Financially, AEHR is currently trading at $21.32 with a Price-to-Book (PB) Ratio of 5.19 and a Price-to-Sales (PS) Ratio of 10.74, both close to their one-year highs. However, the GF Value indicates the stock is significantly overvalued with an estimated value of $16.32, suggesting a potential decline in the long term.

Aehr Test Systems (AEHR) stock experienced a significant surge, rising by 41.5% in the week to Friday morning, driven by a major data center hyperscaler customer placing an order for eight high-power systems for AI processor testing and burn-in. This development marks AEHR's diversification into AI technology, moving beyond its traditional focus on silicon carbide (SiC) wafer-level burn-in test equipment.

The deal is significant as it is a follow-on order from AEHR's "lead production artificial intelligence (AI) processor customer," as described by CEO Gayn Erickson in the company's press release. The customer is described as "one of the premier large-scale data center hyperscalers," fitting the description of Alphabet's Google and Microsoft, which are both developing their AI processors [1].

The AI processor market is experiencing rapid growth, with increasing demand for AI applications and capital spending on AI processor development. This order growth could indicate that AEHR is entering an early innings stage, with a potential market size estimated to be 3 to 5 times larger than the SiC market [2].

AEHR's traditional core business, SiC wafer-level burn-in (WLBI) test equipment, accounted for 90% of its revenue in fiscal 2024 but dropped to less than 40% in fiscal 2025 due to a slowdown in electric vehicle (EV) spending. The new AI-driven orders demonstrate AEHR's ability to open new markets while waiting for the recovery in the EV market, making it an attractive long-term growth stock [3].

Financially, AEHR is currently trading at $21.32 with a Price-to-Book (PB) Ratio of 5.19 and a Price-to-Sales (PS) Ratio of 10.74, both close to their one-year highs. However, the GF Value indicates the stock is significantly overvalued with an estimated value of $16.32, suggesting a potential decline in the long term.

Before investing, consider the Motley Fool Stock Advisor analyst team's top 10 stocks for the current market, which did not include AEHR [1].

References:

[1] https://www.mitrade.com/insights/news/live-news/article-8-988053-20250725
[2] https://www.nasdaq.com/articles/how-ai-sent-aehr-test-systems-stock-surging-higher-week
[3] https://finance.yahoo.com/news/ai-sent-aehr-test-systems-133609841.html