Freedom Broker: Record Aehr orders point to a business turnaround after a weak year

Semiconductor test equipment developer Aehr Test Systems (AEHR) finished fiscal 2026 with earnings above expectations and presented a fiscal 2027 outlook that significantly exceeded market estimates. Freedom Broker analysts note that record demand and an effective backlog of more than $100 million provide high visibility into the company’s future revenue. Experts maintain a “Hold” rating and a $90 per share target price, implying upside of about 25%. 

Aehr’s record backlog

The most important takeaways from the report were record new bookings, an effective backlog above $100 million, and a fiscal 2027 outlook that is largely supported by existing contracts, Freedom Broker analysts say.

In their view, rising demand—rather than quarterly financial metrics—was the key driver of the market’s positive reaction. After the results were released, the company’s shares rose by about 20% in after-hours trading.

Aehr earnings beat market expectations

In the fourth quarter of fiscal 2026, Aehr revenue totaled $18.8 million, up 33.7% year over year. The figure came in slightly above the consensus forecast, though it fell short of Freedom Broker analysts’ expectations.

At the same time, profitability was significantly better than projections. Non-GAAP earnings per share reached $0.11, while Freedom Broker analysts had expected break-even results and the market consensus had been around zero. Gross margin rebounded to 42.6% from 32.7% the prior quarter thanks to higher shipment volumes and more efficient utilization of manufacturing capacity.

Non-GAAP net income was $3.6 million versus a small loss a year earlier. Under GAAP standards, the company also returned to profitability, posting net income of $1.4 million, compared with a $2.9 million loss a year ago.

For the full fiscal 2026 year, revenue reached $50 million, down from $59 million a year earlier. However, the company ended the year with positive non-GAAP profit of $0.9 million, whereas it had previously expected a loss.

About Aehr

Aehr Test Systems specializes in developing semiconductor test and burn-in equipment. The company’s solutions are used in the production of AI accelerators, silicon photonics, automotive electronics, data centers, and silicon carbide–based power semiconductors.

In recent years, the company has also been actively expanding its presence in new segments. One important step was the delivery of the first FOX-XP system to a major manufacturer of silicon photonic integrated circuits. Aehr’s solutions enable simultaneous testing of multiple semiconductor wafers and reduce energy consumption in the production of photonic chips, which are viewed as a promising technology for data centers and artificial intelligence systems. 

Outlook for 2027

The strongest signal for investors was management’s guidance for the new fiscal year. Aehr expects revenue in the range of $130–150 million, implying year-over-year growth of 160–200%. In addition, the company expects non-GAAP net income of 18–22% of revenue, which is also materially above analysts’ prior expectations. According to management, the forecast is based on an effective backlog of $100.6 million, including both confirmed contracts as of quarter-end and orders received after the reporting date. 

AI is becoming a new growth driver

Freedom Broker analysts point to the accelerating diversification of the company’s business. Aehr’s largest customer in the AI segment is shifting burn-in testing processes from the finished-system level to the wafer level, potentially expanding the market for the company’s solutions.

In addition, Aehr has successfully completed testing of WLBI technology with a major manufacturer of AI accelerators, processors, and networking solutions, which is now moving to the pilot production stage.

At the same time, the company continues to strengthen its position in the silicon carbide (SiC) market. Over the past month alone, it received new orders for SiC test systems totaling more than $8 million, including a qualification contract from one of the world’s largest automakers.

Why the rating remains “Hold”

Despite the strong outlook and record backlog, Freedom Broker analysts maintain a “Hold” rating and a $90 target price. Key risks they cite include high dependence on the largest customer in the AI segment, potential margin pressure if the sales mix changes, and risks related to the commercialization of the company’s new solutions.

This is not an individual investment recommendation.