Shares of Aehr Test Systems (NASDAQ:AEHR) are up 6.1% in midday trading Tuesday, extending a torrid summer run in the semiconductor test equipment name. The stock now trades near $116, closing in on its 52-week high of $126.62 after a fresh wave of buying tied to the company’s AI burn-in and silicon photonics story.
Earnings Momentum Keeps Fueling the Rally
The move builds on a blowout fiscal Q4 report. Aehr delivered Q4 revenue of $18.84 million, swung back to profitability with net income of $1.39 million, and posted EPS of $0.11 against expectations for a narrow gain. Record Q4 bookings of $60.7 million pushed effective backlog to $100.6 million, giving the company visibility into a much larger fiscal 2027.
Management’s forward outlook is what changed the stock’s ceiling. Aehr guided fiscal 2027 revenue to $130 million to $150 million, implying 160% to 200% year-over-year growth. CEO Gayn Erickson has been clear about the driver: “We are very pleased with the strong momentum in our business across multiple market segments, highlighted by more than $37 million in quarterly bookings and a book-to-bill ratio exceeding 3.5x.” AI processors and silicon photonics testing together accounted for 91% of Q4 revenue, a dramatic mix shift from the silicon carbide-heavy business investors bought two years ago.
The Silicon Photonics Whipsaw
Here is where the story gets more complicated, and why the stock has been so volatile. Aehr is now one of the purest public plays on optical interconnects for hyperscale AI, a corner of the market that has been swinging on every headline. On August 4, Aehr announced a follow-on production order from its lead silicon photonics customer for a fully automated FOX-XP multi-wafer system with nine independent WaferPak test blades, expected to ship in the first half of 2027. Erickson framed the order as evidence that silicon photonics is moving “from technology adoption to manufacturing scale-up.”
That announcement sent shares up 57% in the days that followed, and the stock is now up 15.8% over the past week and 46% over the past month. Year to date, AEHR is up an eye-watering 426%. But optical and photonics names have traded in violent back-and-forth patterns all summer, whipsawing on hyperscaler capex commentary, competitive positioning, and shifting expectations for co-packaged optics timelines. With a beta of 3.1, Aehr amplifies every move in the group.
Valuation and Positioning Cut Both Ways
The bull case is that backlog now covers roughly 77% of the minimum fiscal 2027 guidance, and while Aehr is expensive, it also has several new ramping markets into the future and has displayed strong recent execution. The bear case has teeth too. The company trades at a price-to-sales ratio of 69. Insiders have been trimming into strength: director Howard T. Slayen sold 20,000 shares at $108.30 on August 4, and Aehr filed an omnibus shelf registration on July 31, signaling flexibility to raise capital.
Wall Street coverage remains constructive. The analyst target price sits at $115, with three buy ratings and one hold. That target is essentially at the stock, meaning further upside now depends on estimates catching up to the fiscal 2027 ramp.
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