Chip-sector players Lumentum, Aehr, and Navitas are banking on AI-driven expansion to triple revenues by 2029, though significant risks regarding customer concentration and lumpy order cycles persist.
Aehr guided fiscal 2027 revenue to $130-$150 million, far above consensus of $85 million, driven by AI burn-in demand, though revenue is lumpy and customer-concentrated.
Lumentum raised its fiscal 2028 earnings target to $40 per share on strong optical switch demand, but heavy reliance on a single customer remains a risk.
Navitas pivoted to AI infrastructure with backlog into 2027, but most revenue growth is back-end loaded and dependent on products launching by late 2027 and 2028.
Lumentum, Aehr, and Navitas are projecting massive revenue growth driven by AI infrastructure demand, with management teams citing strong backlogs and new product cycles. However, analysts warn that these aggressive targets rely heavily on concentrated customer bases and back-end loaded product launches that remain vulnerable to shifts in hyperscaler capital expenditure.
Analysts note that these projections rely on products that have not yet launched and assume consistent demand from a very small number of major customers, creating significant execution risk.
Aehr provides burn-in equipment that stress-tests chips at high heat and voltage to identify potential failures before they are installed in data centers, which is critical for expensive AI GPU racks.