Aehr test systems today
Aehr test systems
- 52 week range
- $6.27
▼
$34.35
- Price target
- $24.00
After posting its biggest single-day gain of 2025, small-cap Aehr Test Systems shares… Nasdaq: AEHR He just took a huge hit. On October 7, shares closed down more than 17% as the market reacted to the company’s latest earnings report. The decline comes on the heels of a critical announcement made by Aehr in late August, which sent shares soaring nearly 36% in a single day. The company said it has received follow-on orders for its Sonoma systems from a major artificial intelligence (AI) company. This excited the markets, positioning Aehr as a small company that could ride the AI wave in a big way.
Below, we’ll break down the key takeaways from the company’s latest earnings that investors should be aware of. In the end, did investors have a chance on this headline-grabbing stock?
Aehr beats estimates, but lack of guidance is disappointing
Aehr released its first-quarter 2026 financial results on October 6, with revenue reaching $11 million. This represents a 16% decline from $13.1 million in the same period last year. However, it came in slightly better than Wall Street estimates of $10.8 million, or a decline of more than 17%. The company also reported adjusted earnings per share (EPS) of 1 cent, which was in line with analyst estimates. Despite these estimates, the stock saw a sharp sell-off — a reaction that may seem puzzling at first glance, but becomes clearer when several fundamental factors are examined.
Notably, Aehr did not provide guidance for the upcoming quarter or full fiscal year. The company noted that tariff uncertainties were a major contributor to this decision. This isn’t too surprising given that 63% of Aehr’s revenue came from Asian customers in fiscal 2025. It’s worth noting that the U.S. and China Implementation delay From the huge tariffs until November 10 to allow negotiations to take place. In addition, a 40% “transshipment” fee affects Southeast Asian countries. With so much uncertainty surrounding these issues, it stands to reason that Aehr is not currently confident in providing financial projections. However, the lack of vision Aehr provided to disappointing markets contributed to its withdrawal.
Aehr’s super-range commands fail to have much effect
Additionally, the company’s hyperscaler order does not appear to have a significant impact on its bookings or backlog. The numbers came in at $11.4 million and $15.5 million, respectively. This was only a slight improvement compared to the $11.1 million and $15.2 million in the fiscal fourth quarter of 2025. Given that shares rose so much on the order announcement, markets likely wanted to see a more significant improvement in these numbers.
The company is still fairly early in its journey to capitalize on the growth of artificial intelligence. Through the acquisition of Incal in July 2024the company acquired a Sonoma product that is attracting super-scale interest. With just over a year to go since the acquisition, the company may still need more time to see a material improvement in its business. This comes despite AI accounting for 40% of total sales last year, representing a significant expansion from 0% the previous year. However, the company’s other markets, such as silicon carbide customers, are declining. This has cast a shadow over AI revenues, which remain small in absolute terms. However, Aehr believes its opportunity in AI is three to five times greater than its opportunity in silicon carbide, providing a path to long-term upside.
Aehr Test Systems (AEHR) price chart for Thursday, October 9, 2025
AEHR: Valuation is getting closer to the floor, but not very attractive yet
Overall, Aehr was a highly valued stock when its earnings came out. Without seeing revenue or a spike in bookings, it was difficult to justify Aehr’s price-to-sales (P/S) ratio of nearly 17x. That figure was in the top 10 among 80 U.S. chip companies with revenue in the past 12 months of $50 million or more. This percentage came as shares rose an additional 22% after the company gained 36% in one day.
As of the close on October 7, the stock is trading at a roughly 14x P/E ratio. This is certainly a significant decline, but it is still high compared to many chip stocks. Aehr has made exciting announcements, but has yet to produce exciting financial results. Hence, the company is still in the proving stage of its AI journey. Aehr’s value proposition of helping customers save money by testing chips for failure before they put them into real-world use remains compelling. These factors combined make Aehr a stock to watch closely in the future. The company could really hit the ground running if it can gain more widespread attention in the AI market.
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