Key Highlights

  • AEIS shares were trading up 10.39% at $239.75 from a prior close of $217.19.
  • Third-quarter Revenue was a record $696 million, up more than 50%.
  • 2026 revenue growth outlook was raised to about 40%.

Advanced Energy Industries (NASDAQ:AEIS) was trading up 10.39% at $239.75 in today's regular session, a gain of $22.56 from the prior close of $217.19, outpacing a chip-sector rebound as technology steadies after a recent AI-driven selloff and ahead of the midterm elections. The company reported record third-quarter revenue of $696 million against an estimate of $644.9 million, and non-GAAP EPS of $3.65 against $3.06.

Advanced Energy, founded in 1981 and based in Denver, designs and makes precision power conversion, measurement and control solutions, including RF, DC and pulsed DC plasma power products, AC-DC and DC-DC power supplies and thermal and gas sensing instrumentation. It serves semiconductor equipment, Data Center computing, industrial and medical, and telecom and networking markets, has about 13,000 employees and sells through direct sales, independent representatives and channel partners.

Third-Quarter Results by Market

Revenue rose 21% sequentially and gross Margin was 42.1%, with Operating Margin at 24.4% and non-GAAP EPS at $3.65 against $1.74 a year earlier. Semiconductor revenue was $322 million, up 64%, data center computing was $256 million, up 49%, industrial and medical was $91 million, up 27%, and telecom and networking was $28 million.

Fourth-Quarter Guidance and the 2027 Outlook

Fourth-quarter guidance is revenue of $735 million plus or minus $25 million, gross margin of 42% to 42.5%, operating expenses of $126 million to $128 million, a tax rate of about 16% and non-GAAP EPS of $3.90 plus or minus $0.30 on 41.2 million shares. The company said that puts it on a run rate to exceed its 2030 target model three years early.

The 2026 growth outlook rose to about 40% from low to mid-30%, with EPS growth above 90%. For 2027, management expects total revenue growth of about 30%, up from a prior view of over 20%, with a gross margin exiting 2027 at 43% or higher and drop-through in the high 40% range. Semiconductor and data center growth is expected to continue into 2028.

The new Thailand factory is ramping, with two data center customers qualified and two top semiconductor customers expected within two to three months. Revenue-generating capacity is on track to exceed $5 billion by the end of 2028, and 2026 Capital Expenditure is expected at the low end of $180 million to $195 million. Supply constraints persist in ICs, PCBs and specialty ceramics. The company ended the quarter with $1.42 billion of cash and $159 million of net cash, redeemed its remaining 2028 convertible notes and repurchased about $30 million of stock in October at about $241 per share.

Analyst Targets and Share Data

Morgan Stanley trimmed its target to $368 and named the stock a Top Pick, Baird moved to $330, Wells Fargo to $310, TD Cowen to $275 with a Hold and Cantor held at $450. The stock has trailing Earnings of $8.51 per share, a forward price-to-earnings ratio of 14.18, a Dividend Yield of 0.17% and a 52-week range of $187.71 to $397.44.

Thailand Ramp and Fourth-Quarter Results Are the Next Markers

Advanced Energy is trading sharply higher on record revenue and a higher outlook. The next items to follow are fourth-quarter results against the $735 million guide, customer qualifications at the Thailand factory and progress on the 2027 growth outlook of about 30%.