ASYS' AI Equipment Sales Surge 5x Y/Y: Can the Momentum Continue?

Amtech Systems ASYS reported better-than-expected results in the third quarter of fiscal 2025. Revenues were $19.6 million, up 26% from the previous quarter. Earnings per share were 6 cents on a non-GAAP basis against a net loss of 16 cents in the prior quarter.

The biggest driver was demand from the artificial intelligence (AI) market. Sales of equipment used in AI infrastructure were five times higher than a year ago and made up about 25% of Thermal Processing Solutions’ revenues. This shows how quickly AI demand is becoming an important part of Amtech’s business. Moreover, management stated that bookings during the third quarter suggest that AI-related demand should remain strong going forward.

However, not all parts of the business are doing well. During the third quarter, demand for products tied to older semiconductor nodes, used in areas like automotive and industrial markets, remained weak. To balance this, Amtech is putting more focus on recurring revenues from consumables, spare parts, and services, which accounted for about 40% of total sales during the third quarter. 

The company is also working on lowering costs. Over the last year and a half, it has reduced its factory footprint by reducing its manufacturing factories from 7 sites to 4 sites, while shifting some production to partners. These steps have resulted in $13 million of annual savings. Looking ahead, Amtech expects revenues of $17-$19 million in the fourth quarter of fiscal 2025, where growth in AI-related equipment sales is expected to be the major growth catalyst.  

How Competitors Fare Against ASYS

Amtech Systems faces competition from larger players, such as Applied Materials AMAT and Lam Research LRCX, that are also targeting AI-related chip packaging.

In the fourth quarter of fiscal 2025, Lam Research reported revenues of $5.17 billion, representing an increase of 34% year over year. The growth was driven by strong demand for LRCX's etch and deposition tools, which are used for AI chip production.

In the third quarter of fiscal 2025, Applied Materials generated revenues of $7.3 billion, representing an increase of 7.7% year over year. The growth was driven by strong demand for AMAT's advanced packaging tools, which are used in AI chips.

ASYS’ Price Performance, Valuation and Estimates

Shares of Amtech Systems have gained 45.5% year to date compared with Zacks Semiconductor - General industry’s growth of 22.8%.

ASYS YTD Price Return Performance

From a valuation standpoint, Amtech Systems trades at a forward price-to-sales ratio of 1.15X, lower than the industry’s average of 13.89X.

ASYS Forward 12-Month P/S Ratio

The Zacks Consensus Estimate for Amtech Systems’ fiscal 2025 is pegged at a loss of 6 cents per share. The estimate has been revised upward over the past 30 days. The Zacks Consensus Estimate for Amtech Systems’ fiscal 2026 earnings is pegged at 15 cents per share, and has remained unchanged over the past 30 days, indicating year-over-year growth of 350%.

Amtech Systems currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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