Start here if you're new
what it is
Advanced Energy sells the power systems that keep chip tools, data centers, and industrial machines running without frying themselves.
how it gets paid
FY2025 revenue was $1.80B, up 21% from $1.48B in FY2024 (company release).
why it's growing
Revenue grew 21.4% last year. Fourth-quarter data-center sales rose 101% vs. prior year to $178 million.
what just happened
Q4 2025 non-GAAP EPS was $1.94 (GAAP from continuing operations $1.31). Q4 revenue was $489.4M. Data Center Computing revenue grew 107% for the full year; Q4 data-center sales were about $178M, up 101% vs. Q4 2024.
At a glance
B++ balance sheet — above average — nothing keeping you up at night
55/100 earnings predictability — expect surprises
47.6x trailing p/e — you're paying up for this one
0.1% dividend yield — cash in your pocket every quarter
20.0% return on capital — nothing to write home about
xvary composite: 67/100 — average
What they do
Advanced Energy sells the power systems that keep chip tools, data centers, and industrial machines running without frying themselves.
This company sits in the part of the stack you do not notice until it fails. Its power conversion systems are designed into semiconductor tools and other high-spec machines, so replacing them means retesting expensive equipment and risking downtime. You can see that dependence in one number: Applied Materials alone was 23% of 2025 sales, which tells you AEIS is embedded with one of the industry's biggest tool makers.
How they make money
$1.8B
annual revenue · their business grew +21.4% last year
total revenue
$1.8B
+21.4%
FY2025 revenue and Q4 figures: Advanced Energy Q4/FY2025 results (Feb 10, 2026) · businesswire.com
The products that matter
precision power and control systems
Precision Power Systems
$1.8B annual revenue base
this is the core business behind the full $1.8B revenue base. the systems sit inside semiconductor and industrial processes where power quality affects yield, uptime, and heat. In human-speak: these parts are boring until they fail, and customers would prefer that not happen.
core
customized data center power platforms
Data Center Power Solutions
$178M quarterly sales · +101%
this was the fastest-growing disclosed pocket of the business in the fourth quarter. At $178M and up 101% from a year ago, it's the reason investors started treating AEIS like an AI infrastructure name. That's the growth engine. It is not yet the whole machine.
growth engine
Key numbers
66.7%
2029 sales gap
The $3.0 billion 2029 revenue view sits 66.7% above today's $1.8 billion, so you are paying for growth that still has to arrive.
47.6x
trailing p/e
P/E → how many dollars you pay for one dollar of profit → so what: this is expensive for a company with projected sales growth of 6.5%.
20.0%
return on capital
Return on capital → profit from each dollar invested in the business → so what: AEIS is still a high-quality operator even with a rich stock price.
101.0%
data-center growth
Data-center sales doubled to $178 million in the fourth quarter, which is the cleanest proof that AI infrastructure demand is showing up in orders.
Financial health
B++
strength
- balance sheet grade B++ — above average financial health
- risk rank 3 — safer than 50% of stocks
- price stability 35 / 100
- net profit margin 15.1% — keeps 15 cents of every dollar in revenue
- return on equity 28% — $0.28 profit for every $1 investors have put in
B++ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in AEIS 3 years ago → it's now worth $32,560.
The index would have given you $14,540.
source: institutional data · total return
What just happened
beat estimates
Q4 2025 revenue was $489M; non-GAAP EPS was $1.94 (GAAP from continuing operations $1.31).
Fourth-quarter data-center sales rose 101% vs. prior year to about $178M. Gross margin in Q4 was 39.7% (company-reported), the strongest in five years. Full-year 2025 revenue reached $1.80B, up 21%.
$489M
Q4 revenue
$1.94
non-GAAP EPS
39.7%
Q4 gross margin
the number that mattered
The key number was 101% data-center sales growth to $178 million, because that is the part of the business investors are paying up for.
-
advanced energy industries continues to scale with data center development.
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fourth-quarter sales from data centers increased 101% vs. prior year to $178 million.this is largely attributed to hyperscaler adoption of its customized power solutions and the technical flexibility of its offerings. ai infrastructure has been expanding rapidly, and its growth will likely push the segment to become the core business. demand for power platforms, direct current architectures, and liquid cooling offerings has been healthy. the more favorable sales mix towards data centers resulted in a large jump in quarterly earnings to $1.94 per share. a higher manufacturing utilization also helped the bottom line, with the closure of a factory in china.
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the company is positioned for strong financial growth in 2026.large tech firms have demonstrated a willingness to invest significant capital into ai infrastructure, and there are no signs of this slowing down. meanwhile, the new megafactory in thailand is helping to relocate manufacturing outside of the u.s. and china to avoid trade tensions surrounding semiconductors. we expect that the semiconductor business will provide stable support for the company to invest in the rapidly expanding data center industry.
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the industrial segment has started to make a small recovery, though expansion is not a priority due to the generally lower profit margins.
-
we are cautiously optimistic about long-term prospects.financial results have been solid as of late, but demand visibility continues to be exceptionally poor.
source: Advanced Energy Q4/FY2025 results · businesswire.com
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What could go wrong
AEIS is being judged on a fast-growing data center story while one customer still accounts for 23% of revenue and management says visibility is exceptionally poor. That combination works beautifully when demand is strong. It gets awkward fast when it is not.
med
customer concentration
23% of revenue comes from a single source. When nearly a quarter of the business sits with one customer, you do not need a collapse for results to feel it. A pause, a timing shift, or a sourcing change would be enough.
This is direct exposure on a $1.8B revenue base. If that relationship weakens, the income statement notices quickly.
med
data center growth normalization
the market fell in love with the $178M quarter and the 101% growth rate. That's fair. The stock is at $305.02 while the analyst midpoint sits at $272. That is what priced-in enthusiasm looks like.
If hyperscaler power spending cools, the fastest-growing piece of the story stops covering for everything else. At 47.6x trailing earnings, that would matter immediately.
med
weak visibility in the legacy business
management called demand visibility exceptionally poor and described industrial recovery as small. That is not fatal. It does mean the non-data-center parts of the company are not giving you much cushion if the hot segment cools.
If industrial demand stays soft while margins stay mixed, earnings get noisier than a 55/100 predictability score already suggests.
23% of AEIS revenue comes from one source, and the shares already trade above the $272 target midpoint. That is a narrow margin for error.
source: institutional data · regulatory filings · risk analysis
Pay attention to
trend
data center sales growth
fourth-quarter data center sales hit $178M and grew 101% from a year ago. if that pace fades quickly, the multiple will feel expensive fast.
metric
the path to $2B revenue
analysts expect $2B in fy2026 revenue. crossing that line would validate the growth setup. missing it would raise awkward valuation questions.
calendar
next industrial read-through
management called the industrial rebound a small recovery. the next update matters because this business still needs a second leg beyond AI infrastructure.
risk
single-customer exposure
23% of revenue tied to one source is not background noise. any change there can overwhelm good news elsewhere.
Analyst rankings
short-term outlook
top 20%
momentum score 2 — in human-speak, analysts expect AEIS to outperform most stocks over the next year.
risk profile
average
stability score 3 — not especially safe, not especially dangerous. middle lane.
chart momentum
average
technical score 3 — the chart is not giving you a special signal right now.
earnings predictability
55 / 100
earnings can surprise you here. that is manageable at a cheap multiple. less so at 47.6x.
source: institutional data
Institutional activity
institutions have been net buying for 3 consecutive quarters — 184 buyers vs. 146 sellers in 4q2025. total institutional holdings: 40.8M shares. net buying for 3 quarters.
source: institutional data
Price targets
3-5 year target range
$146
$397
$305
current price
$272
target midpoint · 11% from current · 3-5yr high: $420 (+40% · 9% ann'l return)
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