Advanced Energy Industries (AEIS) is back on investor radars after Whale Rock Capital Management added the stock to its portfolio, citing the company’s role in power conversion equipment for AI data centers and grid modernization.

The latest move by Whale Rock comes after a sharp pullback, with a 30 day share price return of down 12.29% contrasting with a strong 53% year to date share price return and a very large 1 year total shareholder return of 189.55%. Taken together, these figures suggest that momentum has cooled recently after a powerful run.

If you are looking for more AI exposed ideas beyond Advanced Energy Industries, this is a good moment to scan 47 AI infrastructure stocks for other infrastructure stocks riding similar themes.

With AEIS shares up 53% year to date and the stock trading around $339.65, the key question for investors is whether recent AI optimism leaves room for upside or if the market is already pricing in future growth.

Most Popular Narrative: 13.8% Undervalued

Compared with the last close at $339.65, the most followed narrative points to a fair value of about $393.89, built on detailed growth and margin assumptions using an 8.9% discount rate.

Continuous acceleration in the global adoption of advanced semiconductor manufacturing (including leading-edge logic and memory), combined with the proliferation of digitization and IoT, is leading to strong customer pull for AE's new technology platforms (eVoS, eVerest, NavX). Revenue from these platforms is expected to double in 2025 and ramp further as fabs move to volume production, supporting both future revenue and margin expansion.

Analysts are not just looking at AI data centers, they are layering in compound revenue growth, higher profit margins, and a richer earnings multiple to reach that fair value. Want to see how those moving parts fit together and which assumptions really carry the model?

Result: Fair Value of $393.89 (UNDERVALUED)

However, the story could change quickly if hyperscale data center customers pull back on spending, or if tariffs and semiconductor sector pressures further weigh on margins.

Another View: Rich Multiples Signal Caution

While the analyst narrative sees AEIS as about 13.8% undervalued at $393.89, the current P/E of 67.4x tells a tougher story. That is higher than the Electronic industry at 30x, above peers at 62x, and ahead of a fair ratio of 50.9x, which points to valuation risk if sentiment cools.

For a closer look at how these earnings multiples stack up against the numbers, and where the market could shift over time, See what the numbers say about this price — find out in our valuation breakdown.

Next Steps

After weighing these narratives, do you feel the optimism is justified or stretched, and are you ready to move fast and test that view against the underlying data via 2 key rewards

Looking for more investment ideas?

If you stop with just one stock, you could miss other opportunities that better fit your style, so put the Simply Wall Street Screener to work for you.

• Target potential mispricings by scanning 46 high quality undervalued stocks that combine quality fundamentals with appealing prices.
• Prioritise resilience by focusing on 65 resilient stocks with low risk scores that score well on financial strength and lower risk profiles.
• Hunt for lesser known opportunities using the screener containing 22 high quality undiscovered gems that many investors may not be watching yet.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.