Key Highlights

  • Advanced Energy Industries shares are indicated up 10.69% in pre-market trading at $328.06, extending Monday's 2.37% regular-session gain.
  • Second-quarter revenue reached a record $574 million, up 30% year over year, beating the $544.4 million consensus by 5.45%.
  • Adjusted EPS of $2.74 beat the $2.21 estimate by 25.11%, with gross margin improving 380 basis points year over year to 41.9%.
  • Semiconductor revenue grew 33% year over year, with continued strength in data center computing power products.
  • Management guided third-quarter revenue of approximately $640 million and raised full-year 2026 revenue growth guidance to the low-to-mid 30% range.

What's Driving the Pre-Market Move

Advanced Energy Industries (NASDAQ:AEIS) shares are indicated up 10.69% in pre-market trading at $328.06, building on a 2.37% gain in Monday's regular session. The company reported record second-quarter results, with revenue reaching $574 million, up 30% year over year and 12% sequentially, beating the $544.4 million consensus by 5.45% and topping the high end of guidance.

Advanced Energy Industries is a Denver, Colorado-based global leader in the design, manufacture, and support of highly engineered precision power conversion, measurement, and control solutions for mission-critical applications. Founded in 1981, the company serves diverse end markets including semiconductor equipment, industrial and manufacturing processes, data center computing, telecommunications, and medical and life sciences, with a broad product portfolio spanning plasma power supplies, high- and low-voltage DC-DC converters, and RF power and matching networks.

Adjusted EPS of $2.74 beat the $2.21 estimate by 25.11%, up 83% year over year, with gross margin improving 380 basis points year over year to 41.9% and operating margin reaching 21.9%, a multi-year high. Record semiconductor revenue growth of 33% year over year and continued strength in data center computing power products drove the beat, reinforcing investor optimism around the company's exposure to AI data center and semiconductor capital expenditure cycles.

The results build on pre-earnings momentum, with shares having already risen nearly 6% on July 31 amid bullish analyst commentary and new AI-focused power product launches, and came amid a broader risk-on tone in technology stocks as easing Middle East tensions and falling oil prices lifted the Nasdaq and S&P 500 to fresh highs.

Guidance and Capacity Expansion

For the third quarter, management guided revenue of approximately $640 million, plus or minus $20 million, gross margin of 41% to 41.5%, operating expenses of $120 million, other income of approximately $5 million, a tax rate of approximately 16%, and non-GAAP EPS of $3.00, plus or minus $0.25, on 41 million shares. Full-year 2026 revenue growth guidance was raised to the low-to-mid 30% range, up from the low-to-mid 20% range, with fourth-quarter gross margin expected around 42%.

By segment, semiconductor revenue growth was raised to the low-to-mid 30% range for 2026, while data center computing full-year revenue growth outlook was raised to at least 50%, up from mid-30%, driven by hyperscaler demand and resolution of downstream constraints. The company is investing in capacity expansion, including a new Thailand factory expected to begin production revenue in the fourth quarter of 2026, bringing total revenue-generating capacity to roughly $5 billion, with 2026 capital expenditure guidance raised to $180 million to $195 million to support growth, including accelerated Thailand investments.

The company's balance sheet actions included a $1.15 billion zero-percent convertible note offering in May and redemption of $438 million of 2028 convertible notes, with the remaining $136 million to be redeemed in September, resulting in $1.4 billion total cash and $132 million net cash. Second-quarter operating cash flow was a record $86 million, with full-year 2026 free cash flow targeted at or above 2025 levels despite higher capital expenditure and inventory investment.

Advanced Energy Industries' market capitalization stood at $11.27 billion at Monday's close, with a trailing price-to-earnings ratio of 40.77. The stock's 52-week range spans $128.40 to $397.44.

Conclusion

Advanced Energy Industries' record quarter and sharply raised full-year guidance, driven by accelerating semiconductor and data center demand, reinforce the company's positioning as a beneficiary of AI infrastructure buildout. With capacity expansion underway in Thailand and management projecting continued acceleration into 2027, the durability of today's pre-market gain will likely depend on the company sustaining execution against its newly raised targets.

This article is for informational purposes only and does not constitute investment advice. Readers should conduct their own research before making financial decisions.