Aehr Stock Plummets Pre-Market On Q2 Earnings Miss, But Optimistic Guidance Bolsters Retail Faith

Aehr Test Systems (AEHR) stock tumbled more than 20% in pre-market trading on Tuesday after the company reported weaker-than-expected second-quarter earnings. However, retail sentiment on Stocktwits showed improvement.

The chip testing equipment manufacturer posted earnings of $0.02 per share, falling short of Wall Street's estimate of $0.03 per share, according to Koyfin. 

Quarterly revenue came in at $13.5 million, below the $15 million forecast, representing a steep 37% decline year-on-year (YoY).

Despite the earnings miss, Aehr Test Systems reiterated its fiscal 2025 guidance, targeting at least $70 million in revenue and a non-GAAP net profit before taxes of at least 10%. 

The company highlighted key milestones achieved during the quarter, including securing its first AI processor customer for wafer-level burn-in and its first volume production orders for package part burn-in from an AI processor customer. It also landed its first gallium nitride (GaN) customer for high-volume production.

Gallium has emerged as a critical material in advanced artificial intelligence (AI) technologies because of its superior electrical properties compared to silicon.

As of Nov. 29, 2024, the company reported $35.2 million in cash and equivalents and an effective backlog of $26.6 million.

Aehr Test Systems Sentiment and Message Volume on Jan.14 as of 6:35 a.m. ET | Source: Stocktwits

On Stocktwits, retail sentiment rose to ‘bullish’ from ‘neutral’ a day prior, with chatter levels surging to ‘extremely high’ from previously muted levels.

Some users on the platform feel that the dip in share price is an opportunity to buy more shares. 

Others believe the massive fall in stock price is an overreaction to earnings since the company has maintained its forward-looking guidance. 

Tuesday’s pre-market losses place Aehr Test Systems’ stock at its lowest level in over a month. The stock has dropped 7% over the last year, with most of the decline concentrated in January.

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Read also: Aehr Test Systems Stock Dips Ahead of Q2 Earnings As Retail Watches For Signs Of Recovery