4. Aehr Test Systems (NASDAQ:AEHR)
Number of Hedge Fund Holders In Q2 2024: 12
Short Interest % of Shares Outstanding: 17.19
YTD Share Price Loss: 51%
Aehr Test Systems (NASDAQ:AEHR) is a backend semiconductor company that provides wafer, die, and package testing equipment. Its products are used primarily to test silicon carbide wafers, energy storage silicon, and power management chips. Consequently, the firm has faced a tough time in 2024 as broader industrial use cases of semiconductors have slowed down because of weak industrial output. Silicon Carbide products are used extensively in the EV industry, and the slowdown in this sector coupled with little AI exposure has meant that despite being a semiconductor stock, Aehr Test Systems (NASDAQ:AEHR)’s shares are down 51% year to date. The latest sell off was sparked in August after the firm completed an acquisition of a private California company that specializes in testing AI chips. Investors weren’t impressed though, but they did reward Aehr Test Systems (NASDAQ:AEHR) stock with a 5% price gain in September after it announced a new deal for AI chip package testing solutions. However, the stock is yet to retake its high reached when the firm announced the deal on July 16th.
Aehr Test Systems (NASDAQ:AEHR)’s management commented on the acquisition during the Q2 2024 earnings call. Here is what they said:
“I’m personally very excited and proud to announce today our acquisition plans for Incal Technology, a manufacturer of highly acclaimed reliability test and burn-in solutions of a wide range of semiconductor devices and markets.
They have a particularly strong new product family of ultra-high-power test solutions for AI accelerators, graphics and network processors, and high-performance computing processors. Their ultra-high-power package for our test capabilities, combined with Aehr’s industry-leading lineup of wafer-level test and reliability solutions, uniquely position us to fully capitalize on the rapidly growing opportunity within the AI semiconductor market, as a turnkey provider, a reliability and test that spans from engineering to high-volume production. Incal is in a unique position with intimate knowledge and working relationships with a significant number of AI-industry leaders, providing a front row seat to the technology needs of those customers. They’re shipping systems today for use by a broad range of companies with many of these companies projecting needs to move to high volume production level burn-in of these devices.
Both Aehr and Incal believe there’s a tremendous opportunity to grow this business substantially. Incal has world-class system hardware and software architectures and customers that have a high degree of customer loyalty for their products. Aehr brings worldwide sales and support infrastructure, as well as high value manufacturing capacity and capabilities that together we feel will quickly address customer demand of very high global growth rate of AI and other high-power semiconductors. We also bring R&D resources, technology and processes, and the financial resources to be able to enhance and accelerate new needs that customers may ask for. This unique combination strongly positions us to capitalize on the significant opportunity within the AI market.”
