Aehr Test Systems Stock Soars on Earnings, Eyes Over 150% Revenue Growth

Key Points

• Aehr Test Systems shares jumped nearly 22% after the company beat earnings estimates and issued strong fiscal 2027 revenue guidance of $130 million to $150 million.
• Aehr's fourth-quarter revenue grew 33.7% year-over-year to $18.84 million, while adjusted gross margin soared 1,000 basis points to 45%, aided by AI-related demand.
• Aehr's forward price-to-sales ratio has fallen about 56% from its peak, and analysts at Craig Hallum and Lake Street Capital set price targets implying roughly 40% upside.

As AI stocks swing up and down, one name that has felt those movements as much as any is Aehr Test Systems NASDAQ: AEHR. This small stock has risen about 320% in 2026, and sits at a market capitalization of $2.7 billion in mid-July.

Though shares have been in a downtrend over the past 30 days, they saw a huge rebound after Aehr posted its latest earnings report, spiking nearly 22% in a single day.

Aehr’s large move came as it surpassed estimates during the quarter and issued inspiring guidance.

This guidance meaningfully changes how investors should view Aehr’s valuation and increases confidence in its outlook.

Aehr’s Revenue Rises Over 30%, Gross Margin Explodes Upward

Aehr makes machines that put semiconductors under intense conditions, testing them for defects. As data center operators look to increase performance by weeding out faulty chips, Aehr has been gaining considerable order momentum.

In Q4 of its fiscal year 2026 (FY2026), Aehr posted revenue of $18.84 million. (Note that Aehr’s fiscal reporting period is several quarters ahead of the calendar year period.) This resulted in growth of 33.7% year-over-year (YOY).

Notably, this marks the first time in over a year that Aehr’s quarterly revenue growth was positive, an important inflection for its business. However, analysts expected this performance, with Aehr just slightly beating estimates of $18.69 million.

Alongside this, Aehr crushed estimates on earnings per share (EPS). The figure came in at 11 cents, swinging strongly from -1 cent a year ago. Analysts anticipated that EPS would remain unchanged at -1 cents. This came as Aehr greatly outperformed on adjusted gross margin, which soared 1,000 basis points to 45%, driven by higher sales, improved manufacturing capacity utilization, and a higher-margin product mix.

Despite Aehr’s impressive quarter, full FY2026 revenue declined 15% YOY to $50 million. Aehr’s business has been transitioning from an overwhelming focus on EV markets to one overwhelmingly focused on non-EV markets, including AI.

Aehr Provides Blockbuster Guidance

Aehr’s Q4 FY2026 results were strong, but the company’s guidance is what really stole the show. In FY2027, Aehr expects to generate full-year sales of between $130 million and $150 million. This would be a 160%-200% increase over FY2026.

This guidance crystallizes Aehr’s success in generating orders for its Sonoma and FOX-XP systems. Over the past few quarters, Aehr has repeatedly announced significant orders within the AI chip industry. This has led to the company making strong statements about bookings, such as that second-half FY2026 bookings would come in “at the high end of its $60 million to $80 million range.” A record $41 million hyperscaler order allowed it to surpass that estimate.

Aehr’s huge revenue guidance figure provides a clean metric that shows how far the company has come.

Another figure that underpins this confidence is Aehr’s effective backlog of $100.6 million. The company simply has to deliver these booked orders to realize the revenue, absent cancellations. Assuming Aehr ships its full order backlog in FY2027, it would account for 67% to 77% of the company’s revenue guidance. This provides a strong degree of visibility into Aehr meeting its revenue expectations. It is important to note, though, that Aehr did not explicitly say that its full backlog would necessarily convert in FY2027.

The additional customer demand Aehr anticipates for the rest of the year is the difference between its backlog and guidance. Notably, the company stated that it sees an opportunity to raise its guidance even higher in FY2027.

Aehr expects its adjusted pretax profitability to be between 18% and 22% of revenue in FY2027. At the midpoint, this would imply adjusted pretax income of $28 million. In FY2026, that figure was -$3.7 million, showing that Aehr expects to greatly shift its profitability profile.

Aehr’s Forward Price to Sales Ratio Drops Over 50% From Highs

Using the midpoint of Aehr’s revenue guidance would give it a forward price-to-sales (P/S) ratio of around 20x. That is still a very high figure by most standards, but is down approximately 56% from Aehr’s forward P/S peak of 45x. This shows that the firm's valuation has come much closer to being in line with its revenue expectations.

Additionally, after Aehr’s earnings report, analysts at Craig Hallum and Lake Street Capital placed $125 and $110 price targets on the stock, respectively. The average of these figures implies upside near 40%. Aehr clearly remains a highly volatile and risky stock, but that risk is meaningfully lower than it has been over the past several months. Shares remain substantially below highs, and the company just provided consequential data that supports its fundamental outlook.

Investors interested in Aehr should closely watch how the company’s orders, guidance, and conversion of backlog into revenue progress going forward.