AEIS · Advanced Energy Industries
Conviction · Medium · more likely to lead the S&P 500 over the next three months, by a modest margin
Wrong if: a daily close below $165
Note written ·
Price against the kill line
33.1% clear of its kill line on the 13 November 2026 close.
How to read this
The red mark is the price level of the published kill line: a close through it (a weekly close, on a weekly line) would prove the research note wrong on price. The dot is where the stock closed on 13 November 2026; a dot left of the mark has closed through its line.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close below $165.00, on record since 10 November 2026. The shares are down 37.0% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close below $165, which would put the shares far under the 5 November 2026 post-report low close of $185.66. Fourth-quarter revenue under the $710 million low end of guidance, or Data Center Computing revenue below the third-quarter $256.2 million, would also break the case.
Research onlyNot in the portfolio.
Key figures from the filings · Technology
Quarter to 30 September 2026, filed 2 November 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 696
- Revenue, change on a year (%)
- +50.3
- Gross margin (%)
- 41.5
- Operating margin (%)
- 20.6
- Free cash flow, four quarters ($M)
- 69.9
- Net cash, cash less debt ($M)
- 159
- Price to earnings (×)
- 30.8
- Enterprise value to sales (×)
- 3.8
All filed numbers
What Advanced Energy Industries reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| first filed | 696 | +50.3 | 41.5 | 20.6 |
| first filed | 574 | +30.0 | 41.1 | 16.6 |
| first filed | 511 | +26.3 | 39.3 | 13.4 |
| first filed | 489 | +17.8 | 38.6 | 11.6 |
| first filed | 463 | +23.8 | 37.6 | 10.6 |
| first filed | 442 | +21.0 | 37.0 | 7.2 |
| Pre-tax income ($M) | 152 |
| Net income ($M) four quarters: 289 | 116 |
| Diluted shares, change on a year (%) against the quarter to 30 September 2025 | +7.5 |
| Operating cash flow ($M) | 225 |
| Capital spending ($M) | 155 |
| Free cash flow ($M) | 69.9 |
| Cash and short-term investments ($M) | 1,425 |
| Debt ($M) long-term debt | 1,266 |
| Net cash, cash less debt ($M) | 159 |
| Deferred revenue ($M) | Not reported |
| Backlog, orders not yet delivered ($M) | Not reported |
| Receivables ($M) | 475 |
| Inventory ($M) | 646 |
| Shareholders' equity ($M) | 1,591 |
| Market value ($M) | 8,893 |
| Enterprise value, market value plus net debt ($M) | 8,734 |
| Enterprise value to sales (×) | 3.8 |
| Enterprise value to operating income (×) | 24.0 |
| Price to earnings (×) | 30.8 |
| Price to book value (×) | 5.6 |
| Free-cash-flow yield (%) | 0.8 |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 3.7% of shares outstanding sold short, 3.0 days of average trading to cover, −17.6% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $9.5M |
| 12 monthsfrom | $0 | $35.3M |
The thesis
Advanced Energy Industries is modestly more likely to beat the S&P 500 over the next three months. Its revenue is growing at about 50% a year, and the shares trade 42.4% below their 52-week high. The fourth-quarter 2026 report, expected in early February 2027, settles whether revenue pulls the price back up.
The company reported third-quarter revenue of $696.4 million on 2 November 2026, up about 50% from $463.3 million a year earlier and above its $620–660 million forecast. It guided fourth-quarter revenue to $735 million plus or minus $25 million (company Form 8-K, 2 November 2026). The shares closed at $228.78 on 12 November 2026, against a 52-week intraday high of $397.44 on 21 April 2026 and a 52-week closing low of $185.66 on 5 November 2026.
The price has already recovered part of the post-report drop: closes rose from $185.66 on 5 November 2026 to $219.30 on 9 November 2026 and $231.60 on 11 November 2026. The three-month change is still −30.7% (adjusted daily closes). The market is pricing a peak in the data-center and chip-equipment cycle that the reported numbers do not yet show. An Earnings Whispers review of the report described investors as pricing in a peak, not a miss.
Bullish and bearish views on Advanced Energy Industries, Inc.
The bull case on Advanced Energy Industries, Inc. (AEIS), in brief: revenue beat the guide. The bear case: price fell despite the beat.
Bull case
- Revenue beat the guide. Third-quarter revenue of $696.4 million exceeded the top of the $620–660 million forecast and the $646.39 million consensus cited by Earnings Whispers (company Form 8-K and Earnings Whispers review, 2 November 2026).
- Earnings cleared estimates. Non-GAAP earnings per share were $3.65 against a $3.04 consensus estimate (Earnings Whispers review, 2 November 2026). Non-GAAP gross margin was 42.1% (company Form 8-K, 2 November 2026).
- Data-center sales recovered. Data Center Computing revenue was $256.2 million, up 49% from a year earlier and up from $191.5 million in the second quarter (company Form 8-K, 2 November 2026).
- Chip-tool power sales accelerated. Semiconductor Equipment revenue was $322.2 million, up 64% from a year earlier and up from $278.3 million in the second quarter (company Form 8-K, 2 November 2026).
- The company bought back shares. It repurchased about $30 million of stock in October at an average of $240.77, and held $1,424.6 million of cash on 30 September 2026 (company Form 8-K, 2 November 2026).
- Analyst targets sit far above the price. MarketBeat put the consensus target at $391.64 on 5 November 2026. Citigroup's target is $450 and Morgan Stanley's is $368 after revisions on 3 November 2026.
Bear case
- Price fell despite the beat. The shares closed at $185.66 on 5 November 2026, three sessions after a record quarter. The three-month change to the 12 November 2026 close is −30.7% (adjusted daily closes).
- Targets came down after the report. On 3 November 2026 TD Cowen downgraded the shares to Hold and cut its target to $275 from $370. Baird cut to $330 from $410 and Wells Fargo to $310 from $360 (MarketBeat; GuruFocus).
- Cash conversion trails sales. Operating cash flow was $66 million in the third quarter, down from $86 million in the second. Inventory rose to $645.7 million from $411.2 million at the end of 2025 (Earnings Whispers review of the company's report, 2 November 2026).
- Insiders keep selling. Executive Vice President John Donaghey sold 3,238 shares at $236.95 on 11 November 2026, and director Anne DelSanto sold 265 shares at $200.02 on 5 November 2026. Both sales ran under Rule 10b5-1 pre-arranged plans (SEC Form 4 filings).
- Growth rests on two cyclical markets. Chip-tool makers and data-center computing supply most revenue, so a spending pause in either would hit results (June 2026 Form 10-Q).
- Large 800-volt revenue is distant. Chief Executive Officer Steve Kelley said at the Citi conference on 10 September 2026 that significant 800-volt revenue is not expected before 2028.
Price setup
The last close was $228.78 on 12 November 2026. That is 42.4% below the 52-week intraday high of $397.44 set on 21 April 2026, and 23% above the 52-week closing low of $185.66 on 5 November 2026.
The shares remain under both trend lines. The 50-day moving average is $256.44 and the 200-day moving average is $306.59, both as of the 12 November 2026 close (adjusted daily closes). A close above the 50-day average would show the post-report recovery reaching the intermediate trend. A return below the 5 November 2026 closing low would put the shares at new 52-week closing lows.
Catalysts ahead
- ~4 February 2027 (est.): Fourth-quarter 2026 results and first-quarter 2027 guidance (date not yet announced). It tests the $710–760 million fourth-quarter revenue guide and whether Data Center Computing revenue holds above the third-quarter $256.2 million.
What would change the view
A daily close below $165, which would put the shares far under the 5 November 2026 post-report low close of $185.66. Fourth-quarter revenue under the $710 million low end of guidance, or Data Center Computing revenue below the third-quarter $256.2 million, would also break the case.
The risks this note tracks, each with what would confirm it:
- The market is pricing a slowdown the reported numbers do not yet show, such as an AI-spending pause or lower chip-equipment orders. Confirmed by: a fourth-quarter report showing Data Center Computing or Semiconductor Equipment revenue below the third-quarter $256.2 million and $322.2 million.
- Analysts keep cutting targets after a beat, signalling falling earnings expectations for 2027. Confirmed by: further target or 2027 estimate cuts from the firms that lowered targets on 3 November 2026, or more downgrades following TD Cowen's move to Hold.
- Margins or cash conversion lag revenue growth as inventory builds. Confirmed by: fourth-quarter non-GAAP earnings per share below the $3.60 low end of guidance, non-GAAP gross margin below the 42% low end of guidance, or operating cash flow below the $66 million reported for the third quarter.
- Continued insider selling adds supply while the shares are below their highs. Confirmed by: further Form 4 filings showing open-market sales by executives or directors after the 11 November 2026 sale of 3,238 shares.
What it trades with
Semiconductor Equipment revenue of $322.2 million in the third quarter ties the shares to wafer-fabrication spending and to chip-tool makers such as Lam Research and KLA. Data Center Computing revenue of $256.2 million ties them to AI server and hyperscaler capital spending. A sell-off in either group tends to reach these shares regardless of company results, as the decline after the 2 November 2026 beat showed.
The evidence, claim by claim (8)
- Third-quarter 2026 revenue was $696.4 million, up about 50% from $463.3 million a year earlier; non-GAAP gross margin was 42.1%; operating cash flow from continuing operations was $66 million. Company Form 8-K, Exhibit 99.1 (Q3 2026 results) · as of
- Data Center Computing revenue was $256.2 million, up 49% from a year earlier, against $191.5 million in the second quarter. Company Form 8-K, Exhibit 99.1 · as of
- Semiconductor Equipment revenue was $322.2 million, up 64% from a year earlier, against $278.3 million in the second quarter. Company Form 8-K, Exhibit 99.1 · as of
- Fourth-quarter 2026 guidance: revenue $735 million plus or minus $25 million; non-GAAP earnings per share $3.90 plus or minus $0.30. Company Form 8-K, Exhibit 99.1 · as of
- The company held $1,424.6 million of cash and equivalents on 30 September 2026 and repurchased about $30 million of stock in October at an average of $240.77. Company Form 8-K, Exhibit 99.1 · as of
- TD Cowen downgraded the shares to Hold with a $275 target from $370; Baird cut to $330 from $410; Wells Fargo cut to $310 from $360; Citigroup cut to $450 from $460. MarketBeat and GuruFocus analyst-action reports · as of
- MarketBeat's consensus rating was Moderate Buy with a $391.64 average target. MarketBeat via Daily Political · as of
- Executive Vice President John Donaghey sold 3,238 shares at $236.95 on 11 November 2026 under a Rule 10b5-1 plan. SEC Form 4 filed 12 November 2026 · as of
Sources
- SEC EDGAR
- Advanced Energy Reports Third Quarter 2026 Results · finviz.com
- Finviz ·
- SEC EDGAR
- Advanced Energy Industries (NASDAQ:AEIS) Stock Gets Price Target Trim from Robert W. Baird · marketbeat.com ·
- Advanced Energy Industries (NASDAQ:AEIS) Stock Price Target Cut by Citigroup · marketbeat.com ·
- Advanced Energy Industries (NASDAQ:AEIS) Stock Gets Price Target Trim from TD Cowen · dailypolitical.com ·
- AEIS Maintained by Wells Fargo -- Price Target Lowered to $310 · gurufocus.com
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