Advanced Energy delivered a quarter marked by strong demand in its data center power solutions and a notable recovery in industrial and medical segments. CEO Stephen Kelley attributed the company’s performance to its business diversification strategy, which helped offset softness in some sectors. Kelley highlighted that “our high-efficiency, high-power density products have proven ideal for AI applications,” supporting robust growth in the data center segment. Management also credited increased design wins and product innovation for driving sequential revenue growth in industrial and medical markets.
Is now the time to buy AEIS? Find out in our full research report (it’s free).
Advanced Energy (AEIS) Q2 CY2025 Highlights:
- Revenue: $441.5 million vs analyst estimates of $420.5 million (21% year-on-year growth, 5% beat)
- Adjusted EPS: $1.50 vs analyst estimates of $1.31 (14.7% beat)
- Adjusted EBITDA: $74.5 million vs analyst estimates of $73.27 million (16.9% margin, 1.7% beat)
- Revenue Guidance for Q3 CY2025 is $440 million at the midpoint, above analyst estimates of $420.4 million
- Adjusted EPS guidance for Q3 CY2025 is $1.45 at the midpoint, above analyst estimates of $1.31
- Operating Margin: 7.2%, up from 3.6% in the same quarter last year
- Market Capitalization: $5.98 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Advanced Energy’s Q2 Earnings Call
- Krish Sankar (TD Cowen) asked about the sustainability of elevated data center revenues. CEO Stephen Kelley replied that hyperscaler demand and rapid product cycles support continued growth into 2026, with new ancillary opportunities emerging.
- Robert Stephen Barger (KeyBanc Capital Markets) inquired if data center content per rack translates linearly to revenue. Kelley explained that while revenue per rack increases with power needs, the relationship is not strictly linear, but supports higher average selling prices.
- Joseph Michael Quatrochi (Wells Fargo) probed the reduction in semiconductor growth expectations and tariff impacts. Kelley and CFO Paul Oldham cited customer order shifts, China market softness, and 100+ basis point gross margin headwinds from tariffs, with mitigation efforts ongoing.
- Brian Edward Chin (Stifel) questioned the future growth drivers in data center, especially as new GPU generations roll out. Kelley noted that design wins this year will ramp in 2026 and that the company is reusing technology across projects to accelerate development.
- Scott Graham (Seaport Research Partners) sought clarity on the contribution of new semiconductor products and channel inventory trends in industrial and medical. Oldham emphasized that revenue from new platforms should double this year, with ongoing distributor inventory reductions supporting gradual recovery.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be watching (1) the pace and sustainability of data center revenue growth as hyperscaler investments evolve, (2) progress toward margin expansion, particularly as benefits from the China factory closure and supply chain optimization are realized, and (3) the impact of tariff mitigation strategies on cost structure and competitive positioning. Execution on new product ramps and ongoing recovery in industrial and medical markets will also be important indicators of momentum.
Advanced Energy currently trades at $159, up from $140 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free).
High-Quality Stocks for All Market Conditions
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
