We came across a bullish thesis on Aehr Test Systems, Inc. (AEHR) on Substack by Ashleigh Day. In this article, we will summarize the bulls’ thesis on AEHR. Aehr Test Systems, Inc. (AEHR)'s share was trading at $8.09 as of April 17^th. AEHR’s trailing P/E was 10.37 according to Yahoo Finance.

A technician in a lab coat carefully testing a modern semiconductor component.

AEHR Test Systems recently revised its guidance, attributing the decision to new tariff concerns, although it is more likely the company would have narrowly missed its targets even without the external justification. The data supports this view: AEHR’s inventory levels have risen, indicating they were preparing to ship more orders than materialized, likely expecting faster order flow. The delay is symptomatic of the broader silicon carbide market, which continues to experience a slower-than-expected recovery. Nonetheless, management remains optimistic, especially regarding its leading memory customer, with CEO Gayn Erickson signaling potential revenue contributions beginning in fiscal year 2027.

In this type of environment, where volatility is high and investor patience is thin, the perceived time to value compresses. This dynamic, explored in The (Mis)behavior of Markets, explains how elevated VIX levels cause both crashes and rallies to occur faster, distorting the market’s perception of time. What would normally be a reasonable 1–2-year wait for revenue from memory customers now feels excessive to investors eager for more immediate catalysts. This same dynamic is playing out across sectors, whether it’s waiting two quarters for profitability in a recession-resistant industry or two months for clinical data in a consumer spending-sensitive biotech like INMB. In AEHR’s case, the underlying fundamentals remain intact—supported by a healthy backlog and long-term secular demand—but the disconnect between timing and investor sentiment has created an opportunity. For long-term investors, AEHR’s current mispricing, driven by impatience rather than fundamentals, may offer a compelling entry point into a company positioned to benefit from the eventual silicon carbide rebound and the sizeable memory market once revenue streams begin to materialize in earnest.

Aehr Test Systems, Inc. (AEHR) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 15 hedge fund portfolios held AEHR at the end of the fourth quarter which was 12 in the previous quarter. While we acknowledge the risk and potential of AEHR as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than AEHR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.