AI Stocks
Aehr Q4: AI Data Center Transformation Behind Record FY27 Guide
Aehr historically has found success in the EV market as its test and burn-in equipment proved critical in helping major Tesla supplier Onsemi avoid failures for silicon carbide (SiC) chips in EV deployments. Despite tracing its roots heavily to the EV ecosystem with 95% of revenue tied to EVs two years ago, Aehr is quickly becoming AI data center-oriented. Similar to EVs, its wafer and package-level burn-in solutions are increasingly important in helping avoid failures in complex AI chips and systems. For a company as small as Aehr – just $50 million in TTM revenue and a $2.5 billion market cap -- it has a unique ability to land the biggest customers in an industry, from Onsemi and Tesla before to the leading chipmakers and hyperscalers today. Aehr’s pivot to the data center is nothing short of extraordinary. Despite posting negative growth last fiscal year, the company is inflecting hard into 200% YoY growth, with AI now representing 95% of revenue. Supporting this robust growth is record bookings and backlog, and increasing customer momentum at leading hyperscalers and AI chipmakers. As those who have been with the I/O Fund for a few years know, Aehr require a more active stance. Aehr treated us well in 2022 only because we actively managed the stock, and would only enter again with tight stops and price targets.
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