Chris Forte’s “Thoughts to Start the Day” – Aehr Test

Posted on July 20, 2022 by Scott Shuda

It was an exciting day for Breakout Investors. High fives all around. Why? Aehr Test Systems.

Electric cars need semiconductors, a lot of them, almost double the number in a gas car. But not just any semiconductors – many must be made of Silicon Carbide, not plain old boring Silicon.

Silicon Carbide (SiC) is the new kid on the block. Silicon chips in the past have excelled at moving 0’s and 1’s through the digital world but newer chips like those made of SiC are more “power” oriented. It’s what makes a Tesla go. They move things.

Enter Aehr Test Systems (AEHR), discovered by Breakout Investor Ashleigh Day who long ago saw the potential of the vast SiC market coming at us like a freight tr… er electric vehicle, and how Aehr could facilitate this revolution. He was well ahead of the curve.

Aehr makes vital testing equipment necessary to make the new SiC chips. Massive new plants are being built and geared up to create the new chips for power needs of the future. Aehr is supplying the tools to do this.

Yesterday AEHR checked in with a very good fourth quarter ending May 31. Net sales were $20.3 million, up 166% from $7.6 million in the fourth quarter of fiscal 2021. GAAP net income was $5.8 million, or $0.20 per diluted share, compared to GAAP net income of $567,000, or $0.02 per diluted share. Effective backlog, which includes all orders since the end of the fourth quarter, is over $25.5 million, and cash jumped to $31.5 million, up from $4.6 million.

AEHR also announced it has received $12.8 million in orders from its lead silicon carbide test and burn-in customer.

The earnings call also outlined AEHR future not only in EVs but also other large markets – Silicon Photonics devices for data center and 5G infrastructure, 2D and 3D sensors for mobile and wearable devices, and data storage.

One of the great aspects of belonging to Breakout Investors is gaining immediate insights available on the platform. I encourage you to check out Ashleigh’s invaluable comments on the Feed and in his room.

Commenting on the Feed, Todd Goodwin said: @Ashleigh Day, Very bullish. I love how the Craig Hallum guy mentioned OnSemi by name, and Gayn then mentioned On as their main customer before catching himself. Oops! Of course, it’s no surprise to anyone who follows AEHR.

*Roll Tide rolling in dough: Alabama football players made more than $3 million in name, image and likeness deals over the past year, coach Nick Saban said Tuesday.
*So far in July, the S&P500 up 2%, the Nasdaq 100 up 4%, ARKK up 10.6%, Energy -4%. There’s buying of tech stocks. The market is pulling forward Fed tightening expectations, rate cuts in 2023, and growth stock rally hopes for Q4. People are front running growth stocks for Q4 despite earnings cuts. Good news is selling pressure has diminished. Bad news is buying enthusiasm and volume is modest. – Bob Pisani
*Dolphin Entertainment Q1 Revenue Increases 28% YoY to $9.2M – See Brad Steveson’s post and comments on the Feed.
*Speaking of Brad, his Monthly Elite Call is coming up 7-22-22
*Maybe some of the speculative juices are starting to flow again. The big banks are saying the consumer and companies are in good shape. The bear case has been, “Yeah stock valuations are down but wait until earnings fall too,” – so far that hasn’t happened, no evidence the economy is softening or earnings are eroding fast. – Mike Santoli
*Travel stocks were hot two days in a row. Fewer Covid restrictions are helping cruise lines, and online booking companies are rebounding smartly.
*Mortgage demand hit a 22 year low as applications plummeted. 30 year mortgage rates hit 5.8%

If GM had kept up with technology like the computer industry has, we would all be driving $25 cars that got 1,000 MPG. – BILL GATES

Good luck to all – Chris

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