Bull of the Day: Advanced Energy Industries (AEIS)

To say there’s a lot of hype around AI is the understatement of the decade. It’s been at the headlines of this rally, helping create new fortunes and fuel the next generation of bellwethers. These names have already made some epic runs. If only there was a way to play the surge in a more sustainable way. Maybe…a company that helps to power all these chips and such. Today’s Bull of the Day is one of those names.Enter Advanced Energy Industries (AEIS), the unsung hero of the silicon supply chain, sitting squarely at the intersection of physics, precision, and profitability. It’s not a chipmaker. It’s not an equipment behemoth like Applied Materials. AEIS is the one building the finely tuned, high-precision power systems that make every wafer fab hum like a Swiss watch. When it comes to semiconductor manufacturing, AEIS is the quiet voice that says, “You want clean power? You want consistency down to the electron? We got you.”Let’s get into why this stock, a Zacks Rank #1 (Strong Buy), is one of the most intriguing mid-cap semiconductor plays on the board right now.The Power Behind the ProcessEvery chip, whether it’s in your iPhone, your Tesla, or your AI data center, starts life in a fabrication plant that’s part physics lab, part cleanroom cathedral. These fabs depend on incredibly stable and precise power delivery systems to etch, deposit, and measure at the atomic level.Advanced Energy Industries, Inc. Price and Consensus Advanced Energy Industries, Inc. price-consensus-chart | Advanced Energy Industries, Inc. QuoteThat’s AEIS’s playground.The company designs and manufactures high-performance power conversion, measurement, and control solutions for advanced semiconductor and industrial applications. Think plasma power for etching and deposition, high-voltage power for inspection, and thermal control for all the processes in between. If you’ve ever wondered how a fab keeps the electricity steady enough to carve a transistor only a few atoms thick, AEIS is the answer.That’s why Applied Materials (AMAT), Lam Research (LRCX), and Tokyo Electron are among its biggest customers. They build the gear. AEIS gives that gear its pulse.Tailwinds Stronger Than a Cleanroom AirflowIf you’re wondering why AEIS is in such a sweet spot, it’s because everything semiconductors touch is expanding.AI data centers? They need more wafers. EVs? More power electronics. Renewable energy? More advanced inverters and control systems. And the global fab buildout, led by the U.S., South Korea, and Taiwan, is a multi-year infrastructure boom that plays right into AEIS’s hands.Semiconductor capital equipment spending in 2025 is projected to rebound by double digits after a soft 2024, and AEIS’s management has already signaled that demand from leading-edge nodes (sub-5 nanometer processes) is beginning to recover. The company’s broad exposure means it benefits not only from memory and logic production but also from advanced packaging and inspection. These are areas less cyclical than pure front-end chipmaking.Earnings EnergyNow, the beauty of AEIS isn’t just in the technology, it’s in the trajectory.The company’s last few quarters have shown the kind of disciplined execution you love to see in a cyclical sector. Margins are expanding, backlog visibility is improving, and analysts have been steadily revising earnings to the upside.There is a lot cooking under the hood with this company. Current year Zacks Consensus Estimate calls for $5.68 with is good for 53% growth year-over-year. That’s slated to grow another 15% to $6.54 next year.Onto the revenue side of the equation, current year forecasts call for 16.7% growth to $1.73 billion with next year adding another 6.76% to $1.85 billion.According to its last earnings report, gross margins are hovering near 38%, with management targeting the low 40s by 2026 through better product mix and cost discipline.AEIS doesn’t chase wild, unprofitable growth. It engineers steady, sustainable profitability.  Zacks Names #1 Semiconductor StockThis under-the-radar company specializes in semiconductor products that titans like NVIDIA don't build. It's uniquely positioned to take advantage of the next growth stage of this market. And it's just beginning to enter the spotlight, which is exactly where you want to be.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $971 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Lam Research Corporation (LRCX): Free Stock Analysis Report Applied Materials, Inc. (AMAT): Free Stock Analysis Report Advanced Energy Industries, Inc. (AEIS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks