Believe it or not, Nvidia isn’t the only chip game in town. Axelis Technologies (ACLS) is well positioned to benefit from the growing AI trend since it manufactures ion implantation equipment. OK, that doesn’t sound so sexy. However, it’s crucial gear for producing CPUs, DRAM, and NAND chips—all essential for AI applications. The steady global march towards AI adoption is expected to increase demand for semiconductor manufacturing capacity, potentially boosting Axcelis' equipment sales.
Despite a 6.5% revenue drop in Q1 2024, Axcelis had strong growth in previous years (23% in 2023, 39% in 2022). The semiconductor business is cyclical, especially for computers and other devices, since companies and consumers only upgrade every few years. That’s one reason for a slow start. Management forecasts revenue growth in the second half of 2024. The company projects record revenue of $1.3 billion in 2025 and maintains a substantial order backlog of $1.1 billion.
Who Is Axcelis?
Massachusetts-based Axcelis Technologies designs, manufactures, and maintains semiconductor equipment and services. Founded as Nova Associates in 1978, acquired by Eaton, and spun off as its current company, Axcelis had the goal of making the world’s first high-current production implantation system. It now leads the industry.
The company produces ion implantation systems, thermal processing, dry strip, and curing systems used to fabricate semiconductor chips. Its platforms are built for many applications, from image sensors and memory to power devices and advanced logic. The company also sells aftermarket products and services like spare parts, used tools, maintenance services, equipment upgrades, and training. Axcelis has a market cap of $4.48 billion.
The company is focused on strengthening its implant business and is exploring M&As to expand beyond its $1.3B implant-driven business model.
What The Analysts Are Saying
Axcelis stock, up 800% in the past five years, is considered undervalued compared to its industry peers. Trading at a P/E ratio of 17.9, it is significantly lower than the semiconductor industry average and the S&P 500. Current analyst sentiment rates ACLS as a Strong Buy, with a consensus 12-month price target of $158.33 and a high estimate of $175.
Neither Julie Stoller nor Stocks.News have positions in this company.
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Contributing Writer
As a professional writer since 2012, Julie Stoller has covered many industries, from healthcare and technology to consumer products and industrials. She has written about IPOs, spinoffs, ETFs, stock splits, commodities, legislative actions impacting investors, and macroeconomic issues. While keeping up with the latest meme stocks and trends, Julie's special interests are discovering ...