One inventory that’s not on the radar of most mainstream traders has quietly risen by greater than 300% since April 2025, shifting from an intraday low of $6.27 per share all the way in which to an intraday excessive of $26.43 per share in late August. Beforehand, the inventory had peaked at over $50 per share in 2024. What modified? It turned a synthetic intelligence (AI) inventory after struggling within the downturn of the electrical car market. Most traders most likely have not caught on but, and, till just lately, the corporate could not have acknowledged the AI alternative it had, both.
I am referring to Aehr Take a look at Methods(NASDAQ: AEHR), and I am going to clarify why this firm is essential to the AI and knowledge middle industries. There may be nonetheless a big alternative for traders to capitalize on, even when they missed the underside.
Right here is the 30,000-foot view. When firms, notably hyperscalers, construct large knowledge facilities stuffed with tens of tens of millions, and typically lots of of tens of millions, of semiconductors (chips), they need to be certain that they’re dependable. Excessive failure charges are extraordinarily pricey by way of remediation, labor, downtime, and replacements. If the corporate promoting the chips has a excessive failure charge, its rivals can achieve traction. Aehr Take a look at Methods gives the mandatory reliability testing techniques.
Their significance can’t be understated. The most recent chips are stackable (a number of layers of chips forming one unit), which permits for exponentially extra processing energy. Nevertheless, there’s a catch. Many occasions, they’re a “single level of failure.” In different phrases, if one chip within the stack fails, the whole stack fails. The significance of reliability testing has elevated by an order of magnitude because of this. And now Aehr is the new identify that would grow to be a inventory market darling once more.
Picture supply: Getty Pictures.
You’ve most likely heard concerning the large knowledge facilities that the “hyperscalers,” firms like Meta Platforms, Amazon, Elon Musk’s xAI, and different tech giants, are constructing throughout the nation and the world. In actual fact, attempting to maintain up with the entire bulletins of recent initiatives would make your head spin. In lots of instances, the info middle campus spans greater than a sq. mile and comprises lots of of 1000’s of chips. Elon Musk’s xAI venture, dubbed “Colossus,” is alleged to require over one million GPUs in the long run.
As proven under, the variety of hyperscale knowledge facilities is hovering ad infinitum.
Supply: Statista.
This quantity elevated to greater than 1,100 on the finish of 2024, almost doubling over the previous 5 years. The demand is primarily pushed by synthetic intelligence, which is why Aehr is now an “AI inventory” — and the rationale its share value took off and will proceed larger over the long run.
Aehr nonetheless faces critical challenges. Its income fell from $66 million in fiscal 2024 to $59 million in fiscal 2025. It slipped from an working revenue of $10 million to a lack of $6 million over that interval as the corporate undertook the difficult job of refocusing its enterprise. Nevertheless, traders who dig deeper see a really encouraging signal. The corporate’s backlog (orders which were positioned, however not but fulfilled) jumped to $15 million from $7 million. Aehr additionally introduced a number of orders acquired from main hyperscalers during the last couple of months.
It is difficult to worth Aehr inventory right now. The corporate is in a transition interval, and whereas the AI market appears massively promising, it’s nonetheless a piece in progress. In its heyday, the inventory’s valuation peaked at 31 occasions gross sales, and as just lately as August 2023 it traded for twenty-four occasions gross sales in comparison with 12 occasions gross sales in the present day. The AI market may very well be a gold mine for Aehr, and Aehr inventory appears like a terrific purchase for traders.
Before you purchase inventory in Aehr Take a look at Methods, contemplate this:
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Bradley Guichard has positions in Aehr Take a look at Methods and Amazon. The Motley Idiot has positions in and recommends Amazon and Meta Platforms. The Motley Idiot has a disclosure coverage.
Up 300%, This Synthetic Intelligence (AI) Upstart Has Room to Soar was initially printed by The Motley Idiot
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