Bull of the Day: Advanced Energy Industries, Inc. (AEIS)

Advanced Energy Industries AEIS is a leader in precision power conversion, measurement, and control solutions riding two of the strongest spending cycles in tech: AI data centers and advanced semiconductor manufacturing.

AEIS crushed Q2 earnings estimates in early August and provided stellar guidance that’s sent its FY26 and FY27 EPS estimates soaring as it rides the AI spending boom. Its recent upward earnings revisions earn AEIS a Zacks Rank #1 (Strong Buy) and extend a streak of positive revisions that began at the start of 2026.

The precision power systems company is projected to more than double its adjusted earnings between 2025 and 2027, while expanding its revenue by 70% during that stretch.

Advanced Energy Industries stock has soared ~2,700% in the past 15 years to blow away the Zacks Tech sector’s 950%, including a 160% charge in the past 24 months.

Despite this run, AEIS stock is down around 30% from its all-time highs, and its average Zacks price target implies 50% upside.

The picks-and-shovels AI stock is finding its footing at some vital long-term technical support levels. Plus, its downturn, mixed with its earnings growth outlook, has Advanced Energy Industries trading at a 50% discount to its highs at 26.3X forward 12-month earnings.

Buying Advanced Energy Industries stock empowers investors to ride the broader megatrends of AI and advanced chip manufacturing without having to pick the forward-facing winners. 

Best Stocks to Buy Now and in September: Top-Ranked AI Stock AEIS

Simply put, Advanced Energy makes the specialized power systems that turn raw electricity into tightly controlled power that's need for complex equipment.

Advanced Energy Industries designs and makes precision power conversion, measurement, and control solutions. The firm’s various products and solutions serve customers across critical industries such as semiconductor equipment, networking and telecommunications, and, most importantly, AI data centers.

The company is well diversified, with an established track record of growth long before AI. On top of that, it pays a dividend, which is supported by its sturdy balance sheet.

AEIS’s largest end-market remains semiconductor manufacturing. Its power systems enable the plasma etching and deposition processes needed to build advanced chips, including the current king of tech, AI GPUs.

Beyond chip building, the critical power conversion company is posting explosive growth in the data center computing segment. AEIS is helping supply the efficient, high-power-density power conversion modules that feed massive AI server racks that power the AI hyperscaler boom across Google, Microsoft, and Amazon.

The picks-and-shovels tech company is benefiting from the ongoing AI capex boom that’s heating up regardless of AI bubble worries. AI hyperscalers including Microsoft and beyond are projected to spend ~ $700 billion in AI capex in 2026 and ramp up again next year.

Nvidia confirmed its bullish outlook when it reported its Q2 results last week, sending the AI chip powerhouse higher. Nvidia’s strong outlook and report came not too long after it reached a deal in with BlackRock, Goldman Sachs, and other Wall Street giants to raise $500 billion to ramp up the AI infrastructure build-out.

Not to be left out, Bank of America followed up on Nvidia’s capex news by rolling out a plan to pour $250 billion into AI infrastructure. These spending announcements add to the AI capex boom that's directly benefiting Advanced Energy Industries. 

The Pick-and-Shovels AI and Semiconductor Stock’s Growth

AEIS expanded its Data Center Computing segment revenue by 107% in 2025, boosting overall revenue by 21% YoY. The company followed that explosive growth up with 62% YoY AI data center unit expansion in the first six months of 2026.

The tech firm topped our Q2 earnings estimates by 25% and provided robust guidance, earning AEIS stock a Zacks Rank #1 (Strong Buy). Its third quarter consensus EPS estimate has jumped 30% since its August 3 release, while its FY26 outlook jumped 22% and its 2027 estimate soared 32%.  

Looking ahead, AEIS is projected to grow its adjusted earnings by 75% YoY in 2026 and another 29% next year to soar from $6.41 a share in FY25 to $14.44 a share next year.

Advanced Energy Industries’ stellar bottom line growth outlook comes after it grew its GAAP earnings by 169% last year, after a brief setback. AEIS has also beaten our estimates for five years running outside of one miss in early 2024.

AEIS is projected to grow its revenue by 35% in 2026 and another 25% next year to reach $3 billion. This outlook would see it more than double its 2024 total and blow away its previous sales record of $1.85 billion in 2022. 

Buy the AI-Boosted Tech Stock for Value, Upside & Breakout Potential

AEIS stock skyrocketed ~2,700% over the past 15 years to more than double the Tech sector’s ~950%. This run includes a 160% charge over the last two years that helped it crush Tech’s 62%, AI chip giant Nvidia’s NVDA 85%, and the rest of the Mag 7 from Microsoft MSFT to Meta.

Image Source: Zacks Investment Research

The AI-boosted tech stock’s recent surge helped it soar meaningfully above its previous trading range that it was stuck in between early 2021 and the summer of 2025. AEIS shares are still up 30% in 2026, including a ~30% drop from their May peaks.

Advanced Energy Industries average Zacks price target offers 50% upside from its current levels. On top of that, it is finding support at its 50-week moving average and its highs prior to its gap up in February 2026.

On the valuation front, the tech stock’s fall, coupled with its earnings growth outlook, has it trading at a 50% discount to its highs at 26.3X forward 12-month earnings.

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

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