This Company’s Inflection Point: Why DBS Says "Buy", Maybank Says 'Too Early', CGS Says "Hold"

Here's a snapshot of analysts' forecasts:

DBS Research analyst Amanda Tan captures the core strengths and the growth engines of AEM:

• Technological Edge: AEM provides System Level Test (SLT) solutions, maintaining a technological advantage of about one generation ahead of its rivals.
  
  It's positioned to ride the huge wave of global digitization, AI, 5G, and IoT, which require more complex chips and higher test coverage.
  
  The company’s solutions also address the need for advanced heterogeneous packaging. Longer test times resulting from higher chip complexity mean more wear and tear, leading to higher recurring demand for AEM’s consumables.
  
  
• The AI Anchor: The main driver is an (unnamed) AI fabless customer, whose revenue contributions are anticipated to more than double in FY26. This confidence caused DBS to raise its FY26 revenue estimates by 9%.
  
  
• CPU Market Bounceback: The broader outlook is reinforced by key industry bellwethers signaling a strengthening CPU recovery.
  
  Intel is expecting two consecutive years of client consumption expansion from the post-COVID trough, which should extend into 2026, supported by renewed PC refresh cycles.
  
  AMD echoes this, noting that AI workloads are driving hyperscale clients to forecast significant CPU buildouts into 2026, which translates directly into higher utilization of AEM’s test equipment.
  
  
• Memory Diversification: AEM’s customer diversification strategy is yielding results. Orders for an evaluation final test handler for a new memory customer are on schedule, with initial revenues expected late in FY26, followed by a production ramp in FY27.
  
  Management also pointed out their focus on building platforms compatible with multiple memory customers and hinted at securing an additional memory customer win.

Here’s the lowdown on the company's recent report card (9M25).

The short version is: revenue fine, earnings not so much.

• Revenue Check: AEM pulled in S$287.5 million in revenue for 9M25, which was up 16% year-over-year (y/y) and generally in line with expectation.
  
  This growth was mainly due to the sustained ramp-up with the AI/High Performance Computing customer and the pull-in of non-cancellable, long-dated purchase orders from Intel.
  
  
• The Profit Puzzle: Pre-tax profit (PBT) looked stellar, surging 592% y/y to S$6.2 million in 9M25, but that was against a PBT in 9M24 which had exceptional losses.
  
  
• The Tax Surprise: Net profit was only S$4.0 million for 9M25.
  
  This shortfall stemmed from a massive 62% effective tax rate in 3Q25, driven by the tax treatment applied to certain financial items like provisions, stock compensation, R&D expenditure, and tax credits.
  
  Due to this, analysts slashed their full-year FY25 earnings forecasts: DBS cut theirs by 38%, and Maybank lowered theirs by an even steeper 63%.
  
  

A negative is the ongoing legal case brought by Advantest alleging patent infringement. 

AEM has firmly stated that the allegations lack merit, that the disputed patents are not practiced by their products, and that they will vigorously defend against the claims.

AEM management thinks future legal fees won't reach those of the past in magnitude.

The full reports are here: DBS, CGS, Maybank.