AEM share price to smash $10 in 2023?
It is often said that to win in the stock market, you must buy low and sell high. Yet when a stock goes into a free fall, it takes an investor with incredible gumption to buy the stock. AEM share price (SGX: AWX) is currently in that predicament. After hitting a high of $5.25 in 31 December 2021 due to the pandemic-induced technology boom, AEM share price collapsed to the current $3.40 at the point of writing.
The rise and fall of AEM share price (SGX: AWX) are indeed intriguing yet gut-wrenching for investors. In this context, the high volatility of AEM share price (SGX: AWX) means that this stock is not suitable for retail investors looking for stable returns. Despite so, it is certainly not the endgame for the semiconductor test equipment company. Investors must realize that AEM Holdings operates in a highly cyclical industry and its business is affected by the slump in the sector.
The latest financial result only confirmed what it already known to many investors – recovery of the semiconductor will likely to take place only in the latter half of this year due to the inventory glut across the industry. In view of this, AEM share price (SGX: AWX) faces a blistering winter ahead.
Looking at the latest results, investors had nothing to cheer about as 1st quarter revenue plunged 42% year-on-year to $152.6 million while net profit collapsed by a whopping 62% year-on-year to $15.6 million. The only consolation for investors is that AEM is still making profits but expectations for AEM go beyond that.
The management tried to justify the poor showing by claiming “the exceptionally high revenue in 1Q2022 was due to the volume ramp up to support our key customer’s new platforms which started to taper in 3Q2022”. The fortunes of AEM and Intel are intertwined as the former is a key supplier of Intel and relies heavily on the latter for revenue. On this basis, the corrections of AEM share price (SGX: AWX) was largely attributed to troubles at Intel as the US giant lost its market share to its rivals. In October 2022, AEM share price (SGX: AWX) had suffered a devastating meltdown of 25% within two weeks following reports that Intel is going to lay off workers amid steep decline for its core businesses – PC and Data Center.
Previously, I wrote that I was 200% convinced that AEM share price would rise from the ashes to hit another new high. Given the current slump in the semiconductor industry, will AEM share price recover in 2023? In this article, I will share my view on the outlook for AEM share price (SGX: AWX) in 2023.
Note that this is an opinion article and not meant to be a financial advice. Please do your due diligence or engage financial advisors before investing in the stock market. I am vested in this counter, so my views on AEM share price (SGX: AWX) may be biased.
AEM share price (SGX: AWX) lost its way?
The recent revival and subsequent correction of AEM share price (SGX: AWX) proved that it was a false dawn. The counter surged from $3.00 in late March 2023 to hit a high of $3.60 in early May 2023. That run was probably triggered by the product launches of Intel in April 2023. Many investors were probably buying into the hype. However, reality started to sink in when [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]
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