AOSL · Alpha and Omega Semiconductor
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 $23.47
Note written ·
How this view changed
- · Rated Medium. Results, 5 November 2026: Fiscal Q1 FY27 revenue of $177.8 million and non-GAAP gross margin of 25.2% beat the 12 August 2026 guidance, and December-quarter revenue guidance of about $180 million exceeds the $171.7 million consensus.
Price against the kill line
15.9% 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 $23.47, on record since 10 November 2026. The shares are down 12.5% 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 $23.47, the October closing low, which would erase the post-report rebound. A December-quarter non-GAAP gross margin below 24.7% or revenue below $170 million would also break the case.
Research onlyNot in the portfolio.
Key figures from the filings · Technology
Quarter to 30 September 2026, filed 6 November 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 178
- Revenue, change on a year (%)
- −2.6
- Gross margin (%)
- 24.5
- Operating margin (%)
- −5.1
- Free cash flow, four quarters ($M)
- −72.1
- Net cash, cash less debt ($M)
- 172
- Enterprise value to sales (×)
- 1.0
- Free-cash-flow yield (%)
- −8.7
All filed numbers
What Alpha and Omega Semiconductor 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 ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| first filed | 178 | −2.6 | 24.5 | −5.1 |
| first filed | 170 | −3.5 | 23.1 | −6.4 |
| first filed | 164 | −0.5 | 21.1 | −8.6 |
| first filed | 162 | −6.3 | 21.5 | −8.4 |
| first filed | 183 | +0.3 | 23.5 | −2.5 |
| first filed | 177 | +9.4 | 23.4 | −6.6 |
| Pre-tax income ($M) | −8.8 |
| Net income ($M) four quarters: −46.3 | −6.1 |
| Diluted shares, change on a year (%) against the quarter to 30 September 2025 | +0.8 |
| Operating cash flow ($M) | −20.9 |
| Capital spending ($M) | 51.2 |
| Free cash flow ($M) | −72.1 |
| Cash and short-term investments ($M) | 175 |
| Debt ($M) | 2.9 |
| Net cash, cash less debt ($M) | 172 |
| Deferred revenue ($M) +22.8% on a year | 2.5 |
| Backlog, orders not yet delivered ($M) | Not reported |
| Receivables ($M) | 53.2 |
| Inventory ($M) | 196 |
| Shareholders' equity ($M) | 800 |
| Market value ($M) | 825 |
| Enterprise value, market value plus net debt ($M) | 652 |
| Enterprise value to sales (×) | 1.0 |
| Enterprise value to operating income (×) | Not meaningful |
| Price to earnings (×) | Not meaningful |
| Price to book value (×) | 1.0 |
| Free-cash-flow yield (%) | −8.7 |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 10.5% of shares outstanding sold short, 6.5 days of average trading to cover, +7.7% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $0 |
| 12 monthsfrom | $641K | $2.6M |
The thesis
Alpha and Omega Semiconductor (AOS) is more likely than not to beat the S&P 500 over the next three months. AI and server power chips passed 20% of revenue in the fiscal first quarter of 2027, and guidance for about $180 million of December-quarter revenue is above the $171.746 million consensus. The fiscal second-quarter report, expected around February 2027, decides whether the 25.7% non-GAAP gross-margin guide holds.
The company reported on 5 November 2026. Revenue was $177.8 million, up 4.3% from the previous quarter and down 2.6% from a year earlier. Non-GAAP gross margin was 25.2% against a 24.5% guide, and the non-GAAP loss was $0.07 per share against a $0.14 loss expected (Benzinga).
The shares closed at $18.48 on 5 November 2026, the day of the report, and at $30.53 on 12 November 2026. The 3-month change is −0.8%. The close sits just under the 200-day average of $30.61 and 43.8% below the 52-week intraday high of $54.34 set on 3 June 2026. The rise has outrun the analyst targets: three of the four post-report targets are at or below the current price.
Bullish and bearish views on Alpha and Omega Semiconductor Limited
The bull case on Alpha and Omega Semiconductor Limited (AOSL), in brief: gross margin beat its guide. The bear case: targets were cut after the report.
Bull case
- Gross margin beat its guide. Non-GAAP gross margin was 25.2% against a 24.5% guide and 23.7% in the fiscal fourth quarter (company release, 5 November 2026). The December guide is 25.7% plus or minus 1%.
- AI and server is over a fifth of sales. Revenue in the segment grew more than 65% from the previous quarter and 250% from a year earlier, to over 20% of the total (company release, 5 November 2026).
- Guidance beats consensus. December-quarter revenue is guided to about $180 million plus or minus $10 million, against a $171.746 million consensus (Benzinga, 5 November 2026). Management expects communications up mid-teens and power supply and industrial up high single digits from the previous quarter.
- Losses are narrowing. The GAAP net loss was $6.1 million in the September quarter, against $42.3 million for fiscal 2026. A Finviz analysis of the call says operating expenses of about $46 million imply roughly breakeven non-GAAP operating results in December.
- Lake Street sits well above the price. Lake Street kept Buy with a $40 target on 7 November 2026, and Needham kept Buy with a $30 target on 6 November 2026.
Bear case
- Targets were cut after the report. Needham lowered its target to $30 from $45, Stifel to $27 with a Hold rating, B. Riley to $22 with a Neutral rating (6 November 2026), and Lake Street to $40 (7 November 2026). The $30.53 close on 12 November 2026 is above the first three.
- PCs are shrinking fast. Traditional PC revenue fell about 30% from the previous quarter, and management expects continued weakness in PCs and consumer electronics (Finviz analysis of the call, 5 November 2026). Total computing is guided down mid-to-high single digits in December.
- The company still loses money. The GAAP net loss was $6.1 million, or $0.20 per diluted share, in the September quarter. Earnings multiples do not apply.
- Revenue is still below a year ago. The 2.6% decline from the September quarter of 2025 shows AI and server growth has only just offset weakness elsewhere.
Price setup
The closes after the report were $23.61 on 6 November 2026, $29.17 on 9 November 2026, $28.28 on 10 November 2026, $30.86 on 11 November 2026 and $30.53 on 12 November 2026. The 11 November 2026 close was the first above the 3-month reference close of $30.77 from 14 August 2026. The next session closed below it again.
The 50-day average is $25.56 and the 200-day average is $30.61, both as of 12 November 2026. The shares have moved from well under the 200-day average to a close just beneath it in six sessions. A sustained close above it would put the shares above their average price over the past 200 sessions for the first time since the August reference close.
SEC Form 4 filings show two gifts of 100,947 shares each on 24 August 2026, by Chief Executive Officer Stephen Chang and by director and 10% owner Mike Chang. No insider sales appear in recent Form 4 filings. The company filed its quarterly report on Form 10-Q on 6 November 2026.
Catalysts ahead
- ~4 February 2027 (est.): Fiscal second-quarter 2027 results for the December quarter. Tests the $180 million revenue guide and the 25.7% non-GAAP gross-margin guide, and shows whether AI and server growth outweighs the PC decline.
What would change the view
A daily close below $23.47, the October closing low, which would erase the post-report rebound. A December-quarter non-GAAP gross margin below 24.7% or revenue below $170 million would also break the case.
The risks this note tracks, each with what would confirm it:
- The PC and consumer decline outweighs AI and server growth. Confirmed by: December-quarter revenue below the $170 million low end of guidance, with computing falling faster than the mid-to-high single digits management guided.
- Gross margin stalls below the 25.7% guide. Confirmed by: Non-GAAP gross margin below 24.7% at the fiscal second-quarter 2027 report.
- The share price has run ahead of analyst targets. Confirmed by: further target cuts from Needham ($30), Stifel ($27) or B. Riley ($22), or a cut below $40 from Lake Street, after the fiscal second-quarter 2027 report.
- Losses persist even as revenue grows. Confirmed by: a GAAP net loss near or above the $6.1 million of the fiscal first quarter of 2027 in the December quarter.
What it trades with
AOS sells power semiconductors into computing, communications, power supply and industrial markets. The shares respond to PC and consumer electronics demand on the downside and to AI server buildouts on the upside. China exposure persists after the 11 May 2026 close of the 20.3% Chongqing joint-venture stake sale, so tariff and export-control news reaches the shares. Few analysts cover the company, so a single target revision moves the published average, as on 6 November 2026 and 7 November 2026.
The evidence, claim by claim (8)
- Fiscal first-quarter 2027 revenue was $177.8 million, up 4.3% from the previous quarter and down 2.6% from a year earlier; GAAP gross margin 24.5%, non-GAAP 25.2%. AOS fiscal first-quarter 2027 results release · as of
- Non-GAAP loss was $0.07 per share against a $0.14 loss expected; sales of $177.756 million beat the $176.204 million estimate. Benzinga earnings summary · as of
- December-quarter guidance: revenue about $180 million plus or minus $10 million, non-GAAP gross margin 25.7% plus or minus 1%. The consensus revenue estimate was $171.746 million. AOS results release; Benzinga · as of
- AI and server revenue grew more than 65% from the previous quarter and 250% from a year earlier, to over 20% of total revenue. AOS fiscal first-quarter 2027 results release · as of
- Cash and cash equivalents were $175.2 million; GAAP net loss was $6.1 million ($0.20 per diluted share). AOS fiscal first-quarter 2027 results release · as of
- Traditional PC revenue fell about 30% from the previous quarter; management expects continued weakness in PCs and consumer electronics. Finviz analysis of the fiscal first-quarter 2027 call · as of
- After the report, Needham cut its target to $30 (Buy), Stifel to $27 (Hold), B. Riley to $22 (Neutral) and Lake Street to $40 (Buy). Benzinga analyst actions · as of
- CEO Stephen Chang and director Mike Chang each reported a gift of 100,947 shares on 24 August 2026; no insider sales are listed. SEC Form 4 filings filed 11 September 2026 · as of
Sources
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