Advanced Energy Industries, Inc. (AEIS) | The Buildout — AI Infrastructure

——Mkt cap — · 52-wk —–— · YTD — · delayed

Updated Aug 12, 2026Q1 FY2026 reviewed

Advanced Energy Industries makes precision power conversion products that feed AI data centers and semiconductor equipment.

Data center +50% guide

Management guided at least 50% growth in 2026 after more than doubling in 2025.

$574M Q2 revenue

Up 30% YoY, above the high end of guidance.

Gross margin 41.9%

Q2 reported gross margin up 380 bps YoY; ex-refunds 40.7%.

Top 3 customers 54%

FY2025 top three customers represented 23%, 19%, and 12% of revenue.

The Buildout Takeaway

AEIS is riding two AI-driven demand waves: direct rack-level data center power and semiconductor equipment power for leading-edge fabs. The main open question is whether customer concentration leaves that trajectory exposed.

Analyst coverage

25 analysts·17 Buy7 Hold1 Sell

Median target$415 Range $325–$535 · 7 estimates

Management guidance

FY26 revenue growth low-to-mid-30% · Data center growth at least 50% · Q3 revenue ~$640M ± $20M · Q3 gross margin 41%–41.5% excluding one-time tariff refunds.

Important: The Buildout is a data analytics platform. Content is generated by algorithms and AI agents using public filings, earnings transcripts, and market data. This is not personalized investment advice.

Our View

The Verdict

Advanced Energy Industries designs and builds precision power conversion equipment that turns raw electrical power into tightly controlled power for demanding uses. It sits in the power-conversion layer of the AI buildout: rack-level power supplies go into AI data centers, and plasma power and system power products go into semiconductor manufacturing equipment for leading-edge logic and memory.

Market Cap	—
Revenue (TTM)	$1.9B
Revenue Growth	+22.2%
EBITDA Margin (TTM)	14.6%

Net Cash	$16M
Earnings Beats	7 of 7
P/E (TTM)	—
EV/EBITDA (TTM)	—

What We Like

Data center revenue more than doubled in 2025 and is guided to grow at least 50% in 2026.
Semiconductor Q2 revenue was a record $278 million, up 33% YoY, with second-half 2026 guided up nearly 50% YoY.
Non-GAAP gross margin crossed 40% in Q1 2026 for the first time since the Artesyn acquisition and reached 41.9% reported in Q2.
Management expects record revenue in Q3 and Q4 and has raised full-year guidance twice in consecutive quarters.
Thailand first production revenue pulled forward to Q4 2026; fully built-out capacity target roughly $5 billion.

What We’re Watching

Customer concentration: FY2025 top three customers were 23%, 19%, and 12% of revenue, roughly 54% combined, versus 37% for top two in FY2024.
Data center growth is lumpy: Q2 data center revenue fell 1% sequentially despite 35% YoY growth; the raised guide depends on downstream constraints staying resolved.
Thailand execution: first production revenue is now committed for Q4 2026; qualification slippage or customer demand changes would affect the ramp.
Inventory build: Q2 inventory days rose to 145 days, up 10 days sequentially, with turns around 2.5x; strategic inventory could become a working-capital risk if mix shifts.

Bottom Line

The evidence points to a strengthening thesis: management raised full-year guidance twice, margins have inflected above 40%, and Thailand has been pulled forward into Q4 2026. The open question is whether the trajectory can hold if the largest hyperscale customer pauses or downstream constraints return.

Next upThe next dated catalyst is Q4 2026 Thailand first production revenue, which tests whether new capacity is customer-qualified and ramping. Before that, Q3 2026 results test the $640 million ± $20 million revenue guide and 41%–41.5% gross margin excluding tariff refunds.

Last Quarter — Q1 FY2026

Earnings Beat

Advanced Energy reported Q2 2026 revenue of $574 million, up 30% YoY and above the high end of guidance. Reported gross margin was 41.9%, up 380 basis points YoY; excluding IEEPA tariff refunds, gross margin was 40.7%, still above guidance. Operating income was a record $125 million.

Metric	Q1 FY2026	Q4 FY2025	Q1 FY2025	YoY
Revenue	$511M	$489M	$405M	+26.3%
Gross margin	39.3%	39.4%	37.2%	+210bps
EBITDA	$87M	$79M	$47M	+85.7%
EPS	$1.58	$1.30	$0.65	+144.2%
Data Center Computing revenue	$192M	$194M	n/a	+35% YoY

We are fortunate to be a leading player in 2 large and fast-growing markets, AI data center and semiconductor.— Stephen Kelley, President and CEO, August 3, 2026

Management tone: Management's tone shifted from confident but constraint-aware in Q1 to explicitly acceleration-oriented and more assertive in Q2. They raised full-year guidance twice, pulled Thailand first revenue into Q4 2026, and stated the company expects record revenue in both Q3 and Q4.

Management Guidance

Management guided Q3 2026 revenue to approximately $640 million ± $20 million, Q3 gross margin to 41%–41.5% excluding one-time tariff refunds, and Q3 non-GAAP EPS to approximately $3.00 ± $0.25. For full-year 2026, management raised total revenue growth to low-to-mid-30%, data center growth to at least 50%, and semiconductor second-half growth to nearly 50% year-over-year. Q4 gross margin is expected around 42%, with record revenue expected in both Q3 and Q4. FY2026 capex was raised to $180–195 million, with free cash flow still expected at or above 2025 levels.

Business Trajectory

Trajectory

Trailing revenue went from $463 million in Q3 FY2025 to $489 million in Q4 FY2025 to $511 million in Q1 FY2026, then stepped to $574 million in Q2 FY2026. Gross margin expanded from 38.8% in Q3 FY2025 to 39.4% in Q4, 39.3% in Q1, and 41.9% reported in Q2, driven by volume leverage, product mix, and price-cost discipline, with Q2 including IEEPA tariff refunds.

Revenue & Margin Trajectory

Gross margin as reported.

Share Price — 12 Months

52-week range $150–$389.

Share Price — 12 Months

52-week range $150–$389.

The Numbers

The Model

The model projects FY+1 revenue of $2,235 million and EBITDA of $434 million (19.4% margin), and FY+2 revenue of $2,751 million and EBITDA of $638 million (23.2% margin). The near-term projection is anchored by management's raised 2026 data center and semiconductor growth guidance, while the FY+2 step assumes second-wave data center ramps and Thailand capacity additions contribute.

Revenue & EBITDA Projections

Solid bars are reported actuals; outlined bars are model projections — not company guidance.

Metric	FY2025	Next FY (E)	Following FY (E)
Revenue	$1.8B	$2.2B	$2.8B
YoY Growth	—	+24.2%	+23.1%
EBITDA	$237M	$434M	$638M
EBITDA Margin	13.2%	19.4%	23.2%

Projections are the median of 5 independent model runs. The model’s revenue sits 3.9% above analyst consensus.

What Could Go Right — and Wrong

What good looks like

Second-wave data center customer qualifications complete in 2026 and any pull-in into Q4 2026 adds revenue above guidance.
Thailand first production revenue in Q4 2026 succeeds and fully built-out capacity reaches roughly $5 billion.
800V-to-50V products achieve initial production in late 2027 and high-volume production in 2028, increasing content per rack.
Semiconductor new-product ramps become more meaningful starting late 2026, converting design wins to production.
Management's 2027 direction of at least 20% growth across all markets materializes.

What could go wrong

The largest hyperscale customer pauses or shifts share, given top three customers were 54% of FY2025 revenue.
Downstream processor or memory constraints re-emerge, testing the at-least-50% data center guide and record Q3/Q4 expectations.
Thailand Q4 2026 production slips or qualifications with large customers are delayed.
Strategic inventory keeps building; Q2 inventory days rose to 145 days, and mix shifts could force adjustments.
Clean-room availability in semiconductors shifts into 2027, delaying the near-50% second-half growth plan.

What’s Next

Looking Ahead

The next 12 months center on near-term execution: Q3 2026 and Q4 2026 are expected to be record revenue quarters, Thailand first production revenue is now expected in Q4 2026, and second-wave data center customer qualifications are expected to complete in 2026. Beyond that, semiconductor new-product ramps become more meaningful starting late 2026, and the 800V data center power transition has initial production revenue expected late 2027.

Catalysts

Q3 2026Q3 earnings and guidance — Tests ~$640M ± $20M revenue and 41%–41.5% gross margin ex-refunds.
Q4 2026Thailand first production revenue — Confirms new capacity is qualified and ramping.
2026Second-wave customer qualifications — Completion sets up 2027 production ramps; any pull-in adds upside.
Late 2026Semiconductor new-product inflection — New product revenue becomes more meaningful.

Numbers

Financials

Annual Summary

Metric	FY2024	FY2025	TTM	YoY
Revenue	$1.5B	$1.8B	$1.9B	+21.4%
Gross Margin	35.6%	38.1%	38.7%	+248bps
EBITDA	$105M	$237M	$1.9B	+125.7%
EBITDA Margin	7.1%	13.2%	14.6%	+610bps
Net Income	$54M	$148M	$190M	+173.8%
Free Cash Flow	$74M	$126M	$1.1B	—
Net Cash	—	—	—	—

Key Ratios (Trailing)

Valuation

P/E TTM—
EV/EBITDA TTM—
EV/Revenue TTM—
Price/FCF TTM—

Profitability

Gross Margin (TTM)38.7%
EBITDA Margin (TTM)14.6%
Net Margin (TTM)10.0%
ROIC12.5%
FCF Conversion24.6%
SBC / Revenue1.7%

Reference

The Company

Advanced Energy Industries designs, manufactures, sells, and services precision power conversion, measurement, and control products. Its products transform raw electrical power into controlled power for semiconductor plasma processes, data center computing, industrial and medical equipment, and telecom. Three product families anchor the business: plasma power, high- and low-voltage power, and sensing, controls, and instrumentation. In Q2 2026, Semiconductor was 48% of revenue and Data Center Computing was 33%.

The company operates as one reportable segment of power electronics conversion products on a global, functional basis. It has manufacturing or planned manufacturing in Thailand, Malaysia, the Philippines, Mexico, the United Kingdom, and the United States, with sales and engineering locations across Asia. The Zhongshan, China site ceased operations in 2025. The Thailand facility is 500,000 square feet, with first production revenue now expected in Q4 2026.

Business Segments

Semiconductor

Q2 2026 revenue $278 million

Plasma power and system power for semiconductor equipment, including eVerest, eVoS/eVolt, and NavX platforms.

Growth driver: Leading-edge logic/memory and increasing etch and dep intensity.

Data Center Computing

Q2 2026 revenue $192 million

Rack-level power supplies and conversion modules for AI data centers, including 800V-to-50V products.

Growth driver: AI data center builds and hyperscaler demand

Industrial & Medical

Q2 2026 revenue $80 million

Power and sensing/control products for industrial and medical markets; roughly half of revenue through distribution.

Growth driver: Bookings up 80% YoY, resales up 40%, channel sales up 45%.

Competitive Landscape

The supplied source material does not include AEIS's 10-K competitor-by-vertical roster. Source 3's criticality assessment names Vicor, Delta, and MKS as possible shift recipients if AEIS could not deliver. Management describes Advanced Energy as a leading player in AI data center and semiconductor and says the company is better positioned to gain share than at any other time in its history.

Vicor Corporation
Named in Source 3 criticality assessment as a possible shift recipient for hyperscalers and semi OEMs if AEIS could not deliver.
Delta Electronics, Inc.
Named in Source 3 criticality assessment as a possible shift recipient for hyperscalers and semi OEMs if AEIS could not deliver.
MKS Instruments, Inc.
Named in Source 3 criticality assessment as a possible shift recipient for hyperscalers and semi OEMs if AEIS could not deliver.

Potential alternative suppliers are from Source 3's criticality assessment. The supplied source material does not include a disclosed competitor-by-vertical roster.

Supply Chain

AEIS sits between power-silicon suppliers and data center or semiconductor equipment builders. No supply-chain neighbor mentioned AEIS by name, but several signals corroborate its demand.