AEM Share Price: Fulfilled Its Destiny?

Within a year, AEM’s share price rocketed by nearly 10 times. The meteoric rise of AEM shares certainly stunned the SGX market, as this sort of performance is usually reserved for US tech stocks and is almost unheard of on the SGX. The question now is whether AEM’s share price has fulfilled its true destiny to become one of the greatest tech stocks to grace the Singapore stock market.

Given the supersonic form of AEM’s share price, I have divested all my AEM shares. I am writing this article to note down my thought process and document some of the lessons I learned from investing in this epic stock.

On this blog, I have always maintained that on its day, AEM’s share price can be unbeatable. Conversely, when the tide turns against it, the counter can spiral out of control. On that note, this counter is really not for the faint-hearted.

Through my CPF account, I had invested in 10,000 AEM shares since 2022, having entered at a high of $5.22 in early 2022. That was a time when AEM’s business relied almost entirely on Intel for revenue. This business concentration in Intel created significant risks for AEM, especially as the US company struggled quite severely in the opening chapters of the generative AI race. Consequently, AEM’s share price bombed to a low of $1.05 in April 2025.

I would be lying if I claimed that the thought of cutting losses did not cross my mind. Obviously, you start to doubt your judgment when you suffer a paper loss of as much as 80%. The sole reason I continued to hold onto my AEM shares for the past four years was conviction. My investment thesis was that AEM holds a competitive advantage through its robust intellectual property portfolio, specifically tailored around its core strength: System-Level Testing (SLT) for advanced High-Performance Computing (HPC) and AI chips.

AEM’s patent portfolio ensures that the homegrown company remains at least one generation ahead of its competitors—Advantest, Cohu, and Teradyne. I believe Temasek Holdings shares this view, as it has not trimmed its stake in AEM through the years, even while substantial shareholders like EPF and Aberdeen have either reduced or divested their shares.

Using my CPF savings, I have always maintained a buy-and-hold strategy for AEM shares. However, no matter how good a stock is, I always tell myself that I must have the discipline to exit at my desired price. On 14 May 2026, I sold off all 10,000 shares in my CPF account at $9.18. Then, on 15 May 2026, I sold off the 100 bonus shares at $10.50. The total return for my CPF investments amounted to $40,650, representing a return of 78% over a holding period of four years.

Over the past month, I also adopted a hit-and-run strategy using my cash brokerage account. From 28 to 30 April, I did a contra trade of 10,000 AEM shares and made $2,900. Subsequently, I bought another 10,000 shares on 30 April and sold them for a profit of $24,000 on 14 May 2026. Using my SRS account, I also bought and sold 200 shares of AEM for a profit of $500.

Taking into account my CPF, cash, and SRS investments, my total profit from AEM amounted to $68,050. This makes AEM my best stock investment to date.Note: This is an opinion article and is not meant to be financial advice. Please do your own due diligence or engage a certified financial advisor before investing in the stock market. Because I have invested in this counter, my views on AEM’s share price may be biased.

Will AEM’s Share Price Go Higher?

AEM shares have retraced lately from their record high of $10.60 to sit around $8.80. Although I exited this counter at $10.30, I do not think the share price has peaked yet. I am still of the view that the stock is worth at least $10. This was my view back in 2020 and 2023, and it remains unchanged.

In fact, the hypersonic form of AEM’s share price led to a slew of analysts scrambling to upgrade their target prices, with CGS International setting an astonishing $10.15 target and DBS setting a target of $11.80.

My view is that AEM’s share price should return to its blistering form in June before the release of its 1HFY2026 results. That will be a baptism of fire for AEM, as the revenue ramps from its two AI/HPC customers will finally be unveiled. For 1QFY2026, revenue increased 35.8% year-on-year to hit $116.9 million, while net profit skyrocketed 329% to smash past $14.3 million. Traditionally, the first quarter is the slowest for AEM. Therefore, I expect the subsequent quarters to be spectacular in terms of both revenue and net profit.

These solid financial results have strengthened AEM’s financial position, allowing the Group to maintain a net cash position of $56.5 million as of 31 March 2026. But what really caught my eye was that the net profit margin returned to double digits at 12.3%. This increase in net profit margin can be attributed to higher revenue from its flagship business unit, the Test Cell Solutions (“TCS”) segment, which grew 72.0% year-on-year to $88.1 million, accounting for 75.4% of total Group revenue.

Unlocking AEM’s True Value

While the successful diversification of its customer base has given AEM’s share price plenty of sparkle, I believe the key to unlocking its true value lies in a dual-listing on Nasdaq and the SGX, alongside riding the current structural shift in the semiconductor industry.

AEM is one of those rare homegrown deep-tech companies that holds valuable, proprietary thermal control technology for testing AI chips. Its technology is highly sought after by global chipmakers like Intel, AMD, Nvidia, ASE, and the like. Meanwhile, its direct peers—Teradyne and Cohu—are listed on Nasdaq. Recent regulatory developments make me think that a dual-listing on Nasdaq could very well be on the cards.

On 7 April 2026, Minister Chee Hong Tat read the bill for MAS to implement the Global Listing Board (GLB) to facilitate the dual-listing of SGX companies on Nasdaq. Following the news, AEM’s share price rocketed, leading its market cap to cross $2 billion—the exact eligibility threshold for the GLB. Then, JP Morgan appeared out of nowhere to become a substantial shareholder of AEM on 10 April 2026. Within a month, AEM soared from the $4+ range to the current $7+ and $8+ levels. Based on these events, I am of the opinion that the big boys are betting on AEM listing on Nasdaq, probably by the end of 2026.

On 30 April 2026, MAS proposed a new framework that paved the way for the GLB to go live in mid-2026. As a deep-tech company, AEM is a prime candidate for the GLB. After all, Nasdaq is an exchange saturated with tech, including homegrown players like Grab. A dual listing on Nasdaq makes perfect sense for investors, as it would effectively create a 24-hour trading cycle for AEM shares and significantly drive up trading liquidity.

Despite the excitement, a Nasdaq listing remains a long shot at the end of the day. What matters most is whether AEM can successfully ride the current industry shift toward System-Level Testing. AI/HPC chips are now so complex that they must be tested as a “full system.” AEM is a pioneer in SLT, which is fast becoming a structural requirement for the AI era. The transition to four major customer pillars (including a new AI leader expected to overtake Intel in 2026) represents a structural re-rating of the company’s risk profile. This is exactly why analysts have raised their target prices to $8.90 and $10.15.

2026 Should Be the Start of an Upcycle

Although AEM is enjoying the benefits of these structural shifts, its business remains dependent on the capital expenditure of chipmakers. During 2023–2024, AEM’s earnings crashed due to an industry-wide inventory over-glut. So, to be sure, while we are currently in the early stages of an upcycle, cyclical downturns will still happen.

Currently, AEM’s Test Cell business should be receiving volume ramps from both Intel and AMD. Intel’s foundry business has also secured major customer wins, such as Elon Musk’s Terafab and Microsoft. In fact, Intel Foundry’s revenue grew 16% year-over-year to $5.4 billion in Q1 2026. Let’s also not forget that the US government has invested $8.9 billion directly into Intel common stock as part of the CHIPS Act and Secure Enclave programs. These developments have led to a massive revival for Intel.

The recent EPIC award affirms that AEM remains a top-tier equipment supplier for Intel. It also serves as an important bridge for AEM to enter the Intel Foundry Services (IFS) ecosystem. Traditionally, Intel built its own manufacturing plants for its own chips, and AEM acted as its supplier to test them. As Intel pivots to manufacturing chips for third parties like Nvidia, Microsoft, or Amazon via IFS, AEM’s System-Level Test equipment will be used to test those external customers’ chips as well.

After years of heavy investment in R&D, AEM highlighted growth from a second AI/HPC customer that is currently ramping up high-volume manufacturing. This data confirms that they now have at least two major players in the AI/HPC space. AEM also mentioned that demand from this second AI/HPC customer remains robust and that “revenue contribution is anticipated to grow significantly in FY2026, en route to becoming the Group’s new top customer by revenue.” Based on market speculation, this second customer could be AMD.

Key Risks to Watch Out For

The ongoing patent dispute with Advantest vindicates my belief that the key battle in the semiconductor industry lies in intellectual property. AEM’s proprietary Thermal Control Technology is considered its “crown jewel,” providing the competitive advantage needed to gain market share. As AI and High-Performance Computing (HPC) chips become more powerful, they generate extreme heat. AEM’s patented ability to test these chips under precise thermal conditions without causing damage has allowed it to win major contracts with “next-gen” AI customers, diversifying away from its historical reliance on Intel.

In 2025, AEM continued to double down on R&D activities, with R&D expenses increasing 1% to $23.8 million. The investment appears to be paying off, as FY2025 revenue hit S$399 million, driven by this “second major AI/HPC customer” which now accounts for over 25% of their Test Cell revenue.

On the other hand, AEM is embroiled in yet another lawsuit from its main competitor, Advantest, who is suing AEM over the alleged infringement of two patents relating to wafer-level test systems. AEM claims that the patents relate to a specific wafer-level test system that is not practiced by the company, and strongly denies the allegations in Advantest’s complaint. AEM has already retained U.S. counsel to defend itself against these claims, stating they lack merit.

It all feels like déjà vu to me, as Advantest previously sued AEM over patent infringement back in 2021. In that saga, AEM ended up paying Advantest US$20 million in two installments. Additionally, it was a long, drawn-out legal battle that caused AEM to incur massive legal fees. According to DBS research, AEM incurred $11.1 million, $27.0 million, and $9.0 million in legal fees across FY21, FY22, and FY23 respectively, compared to just $5.1 million in FY20 and $9.2 million in FY24. Both the legal fees and the arbitration settlement weighed heavily on AEM’s financial performance, plunging the company into turmoil at the time.

The company has maintained that “the filing of Advantest’s latest complaint does not affect AEM’s business operations, its existing commercial offerings or products, or its ongoing ability to serve its customers. The Company maintains its revenue guidance for 2H 2025 as previously announced on 13 Aug 2025.”

Notwithstanding AEM’s confident stance, I think it is too premature to claim that the latest lawsuit will have no material impact on AEM’s reputation, given that it is still a relatively small player on the global stage. For this reason, I believe investors should tread with caution.

Conclusion

Although I have divested all my shares in AEM, I am still keeping a close watch on this counter and may re-enter if it retraces to $6 again. Being in a cyclical industry, AEM stock is bound to be highly volatile. Some people have questioned my rationale for adopting a buy-and-hold strategy since 2022. Honestly, I don’t think there is a right or wrong answer; it all boils down to whether you have conviction in the stock and are comfortable holding it for the long run.

At the end of the day, I tell myself that I am solely responsible for making the judgment calls when it comes to cashing in profits or taking losses. There are many people who claim to be value investors but can’t hold a stock for 4 months, let alone 4 years. No matter how good a stock is, we must always have the discipline to set an exit price.

The macroeconomic fundamentals have turned highly favorable for AEM, but the looming Advantest lawsuit could still throw a spanner in the works for the company’s recovery. That said, the long-term potential is undeniably there, but existing investors need strong holding power to ride out the volatility. In this regard, I am cautiously optimistic that AEM’s share price may hit $20 by the end of the cycle. Until then, enjoy the ride.