Advanced Energy AEIS benefits from strong demand for semiconductor equipment, driven by increasing investments in advanced logic and memory manufacturing. The company’s growing adoption of precision power solutions and expanding product portfolio strengthen its competitive position against KLA KLAC and MKS MKSI, which are also benefiting from semiconductor industry growth.
The company reported record semiconductor revenues of $278 million in the second quarter of 2026, increasing 33% year over year and 27% sequentially. Growth was driven by robust demand for leading-edge memory and logic technologies, alongside rising etch and deposition intensity. Management expects semiconductor revenues to increase nearly 50% year over year in the second half of 2026, reflecting sustained customer demand.
AEIS is strengthening its market position through innovative plasma power technologies, including its eVerest and eVoS platforms. These solutions deliver improved yield and throughput for advanced semiconductor manufacturing processes. The company is also gaining traction in system power applications, securing design wins in semiconductor testing, atomic layer deposition and thermal sensing. New product ramps and additional design wins are expected to accelerate revenue growth in 2027 and beyond.
The company’s expanding manufacturing footprint is another growth catalyst. AEIS expects to begin generating revenue from its new Thailand facility in the fourth quarter of 2026. Once fully developed, its global manufacturing network is expected to support approximately $5 billion in annual revenue-generating capacity, providing flexibility to address rising semiconductor and data center demand.
AEIS’s strong semiconductor revenue growth, expanding product portfolio and improving manufacturing capabilities are expected to boost top-line growth and position it favorably against KLAC and MKSI. For the third quarter of 2026, Advanced Energy expects revenues of $640 million, plus or minus $20 million.
AEIS Faces Stiff Competition
The company is facing stiff competition from companies like KLA and MKS. Both KLA and MKSI are expanding their footprint in the semiconductor market.
KLA is benefiting from strong semiconductor demand, driven by accelerating investments in AI infrastructure, leading-edge foundry/logic, memory and advanced packaging. In the fourth quarter of fiscal 2026, revenues reached a record $3.66 billion, increasing 15% year over year and 7% sequentially. Management attributed the performance to rising AI infrastructure investments and greater process-control intensity across memory and advanced packaging.
MKS is benefiting from rising AI-related investment across semiconductor and advanced packaging markets, with demand broadening through memory, logic, advanced PCBs, photonics, and chemistry equipment. Second-quarter 2026 semiconductor revenues rose 28% year over year to $554 million, with broad-based growth across deposition and etch applications. Management expects third-quarter 2026 semiconductor revenues of $630 million (+/- $15 million), implying more than 50% year-over-year growth, supported by a healthy backlog, NAND upgrades, advanced logic and DRAM demand and design wins in dissolved gas and RF power.
AEIS Share Price Performance, Valuation and Estimates
Advanced Energy shares have surged 14.4% in the year-to-date period, underperforming the Zacks Computer & Technology sector’s rise of 17% and the Zacks Semiconductor Equipment - Wafer Fabrication industry’s surge of 52.5%.
AEIS Stock Performance
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Advanced Energy shares are currently overvalued, as suggested by its Value Score of F. In terms of the forward 12-month Price/Earnings ratio, AEIS is trading at 20.36X, higher than the Computer & Technology sector’s 19.59X.
AEIS Valuation
Image Source: Zacks Investment Research
For 2026, the Zacks Consensus Estimate for earnings is pegged at $11.21 per share, unchanged over the past 30 days. The figure implies a year-over-year increase of 74.88%.
Advanced Energy Industries, Inc. Price and Consensus
Advanced Energy Industries, Inc. price-consensus-chart | Advanced Energy Industries, Inc. Quote
Advanced Energy currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).