AEHR

AEHR is a high-quality niche semiconductor burn-in/test maker riding through a sharp cyclical downturn, and the problem is not the business model — it's the price. Revenue fell 10.9% to $59.0M in FY2025, gross profit dropped 26.5% (margin compressing to 40.6%), and the company swung from $33.2M net income in FY2024 to a $3.91M loss, with operating income at -$5.68M. Operating cash flow turned deeply negative at -$7.40M and cash was halved to $24.5M while capex spiked. The revenue arc tells the story plainly: $50.8M → $65.0M → $66.2M (FY2024 peak) → $59.0M, so this is a post-peak roll-over, not a growth stock in stride.

The filing pinpoints why this is structurally fragile right now. Sales to the five largest customers were 77% of revenue (two alone at 39% and 15%), and a 'substantial portion' comes from small-volume, high-value system sales that can slip a full quarter on one cancellation. Management explicitly ties the business to silicon carbide demand for EVs and warns a 'prolonged slowdown' would hit results — and notes that second-half FY2025 tariff uncertainty already 'impacted customer demand and orders.' That is exactly the demand picture the FY2025 numbers reflect.