Aehr Test Systems is experiencing a downturn in traditional end markets due to a slowdown in electric vehicle investment. However, the company has successfully entered new markets that could potentially be much larger than its core silicon carbide market. Shares of Aehr Test Systems dropped by 22.2% in the first half of 2025, but the stock saw a significant turnaround in the last three months of the half-year. The company is expanding into new markets, including the artificial intelligence processor burn-in market, with optimism that these markets could be 3 to 5 times larger than its traditional markets.

Management believes that its AI end markets are potentially much larger than its traditional markets and that optimism is driving the current stock price strength. The company has secured major customers in the AI processor burn-in market, including a major hyperscaler, and is on track to generate a significant portion of revenue from new markets. The Motley Fool Stock Advisor analyst team did not include Aehr Test Systems in their list of the 10 best stocks to buy now, emphasizing the potential for monster returns from other investments.

Read more at Yahoo Finance: Here’s Why Aehr Test Systems Stock Had a Wild Ride in the First Half of 2025