The analyst expects the company to focus on its Industrial and Medical end markets, with new design and market share wins in I&M to offer growth and diversification in the near term.

Barger expects a cyclical recovery in its semi-focused business, whenever it comes, to be substantial, given the destocking through the channel.

The analyst also believes AI will facilitate data center growth in the long term.

Barger raised the 2024 EPS estimate to $6.22 from $6.04 (consensus $5.92) on cyclical recovery and new wins in the I&M business.

The analyst reiterated the 2023 EPS estimate at $4.97 (consensus $4.61) and introduced the 2025 estimate of $7.81 (consensus $8.87), expecting continued Semiconductor cyclical recovery, acceleration in I&M, and the favorable impact of AI on datacenter build-out and a shift to 48-volt power supplies. 

Price Action: AEIS shares are trading lower by 0.39% at $105.31 on the last check Friday.