Aehr Test Systems selloff brings buying opportunity, says William Blair

William Blair analyst Jed Dorsheimer says Aehr Test Systems (AEHR) shares traded down almost 20% yesterday from a read-through of its main customer’s earnings, ON Semiconductor (ON). ON wss 80% of Aehr’s fiscal 2023 revenue, so its lower guide and capex spend for silicon carbide are a new risk to Aehr’s $100M revenue guide for fiscal 2024, the analyst tells investors in a research note. The firm says that while SiC remains the “workhorse of revenue growth” in the near to medium term for Aehr, opportunities across gallium nitride, memory, and silicon photonics represent growth engines for the company on a multiyear horizon. It keeps an Outperform rating on the shares.