The semiconductor industry is experiencing a remarkable surge, with several stocks demonstrating robust momentum gains that have propelled them into the top 10th percentile of their peers.4 Chipmakers With Strong Technicals And MomentumBased on the latest momentum percentile rankings, four chipmakers—Amtech Systems Inc. (NASDAQ:ASYS), Lam Research Corp. (NASDAQ:LRCX), Silicon Motion Technology Corp. (NASDAQ:SIMO), and Wolfspeed Inc. (NYSE:WOLF) stand out for their impressive week-on-week momentum increases. ...

Group 1 - The last coverage on Amtech Systems, Inc. (NASDAQ: ASYS) was in July 2023, with a 'Hold' rating and shares trading at $9.25 per share at that time [1] - The company is recognized for its keen valuation, positive bottom-line profitability, and strong balance sheet [1] - The investment strategy focuses on buying undervalued profitable stocks with strong balance sheets and minimal debt, while also considering writing calls against positions for additional income [1]

Core Insights - Amtech Systems (ASYS) is implementing cost reduction initiatives to enhance operational efficiency, consolidating its manufacturing footprint from seven factories to four and outsourcing more production, resulting in annual savings of approximately $13 million [1][2] Cost Reduction and Operational Efficiency - A significant aspect of Amtech's transformation is the adoption of a semi-fabless manufacturing model, which reduces fixed costs and improves operating leverage, allowing the company to remain profitable despite uneven market demand [2] - Demand for AI-related equipment has surged, with sales increasing fivefold compared to the previous year, while demand for semiconductor tools in automotive and industrial markets remains weak [2] - In Q3 of fiscal 2025, Amtech's non-GAAP margins reached 47%, up from 36% in the prior quarter, with adjusted EBITDA of $2.2 million, a significant improvement from a negative EBITDA of $1.4 million in the previous quarter [3][9] Future Outlook - Amtech plans to rent out unused facilities, contributing to additional cost savings, and anticipates Q4 fiscal 2025 revenues between $17 million and $19 million, with adjusted EBITDA margins in the mid-single digits [4][9] - The company's cost reduction strategies are expected to enhance margins and contribute to a more stable business model over time [4] Competitive Landscape - Amtech faces competition from larger companies like Applied Materials (AMAT) and Lam Research (LRCX), which are also focused on operational efficiency [5] - In Q3 fiscal 2025, Applied Materials reported $7.3 billion in sales, driven by demand for advanced packaging tools for AI, while Lam Research posted $4.7 billion in revenues, a 24% increase from the previous year, supported by a close-to-customer manufacturing model [5][6] Stock Performance and Valuation - Amtech's shares have increased by 70.7% year-to-date, outperforming the Zacks Semiconductor - General industry, which grew by 29.9% [7] - The company trades at a forward price-to-sales ratio of 1.67X, significantly lower than the industry average of 14.55X [11] - The Zacks Consensus Estimate for Amtech's fiscal 2025 is a loss of 6 cents per share, with an upward revision over the past 60 days, while the estimate for fiscal 2026 earnings is 15 cents per share, indicating a year-over-year growth of 350% [14]

Core Insights - Amtech Systems (ASYS) and Applied Materials (AMAT) are pivotal players in the semiconductor ecosystem, with ASYS focusing on thermal processing and silicon wafer equipment, while AMAT provides a broader range of tools for major chipmakers [1][2] Amtech Systems (ASYS) - ASYS has identified advanced packaging as a significant growth opportunity, particularly in AI infrastructure, with equipment sales for AI applications increasing fivefold year-over-year, constituting about 25% of Thermal Processing Solutions' revenues [3][4] - The company projects revenues of $17-$19 million for Q4 fiscal 2025, driven by AI-related equipment sales, despite a forecasted decline of 24.4% in fiscal 2025 revenues, with a recovery expected in fiscal 2026 at an estimated growth of 4.6% [5][6] - ASYS has restructured operations to enhance cost efficiency, reducing its manufacturing sites from seven to four, resulting in annual savings of $13 million [7][8] - The stock trades at a forward sales multiple of 1.66X, indicating a discounted valuation compared to AMAT's 4.60X [16] Applied Materials (AMAT) - AMAT is a leader in semiconductor fabrication equipment, with strong long-term growth prospects due to its advancements in AI-driven semiconductor technology [9][10] - The company has seen significant revenue generation from its Sym3 Magnum etch system, exceeding $1.2 billion since its launch, and anticipates over 50% revenue growth from DRAM customers in fiscal 2025 [11] - However, AMAT faces challenges from U.S. government restrictions on selling advanced semiconductor equipment to Chinese manufacturers, impacting its sales and growth outlook, with projected year-over-year revenue growth of 4.5% and 2.7% for fiscal 2025 and 2026, respectively [12][13] Price Performance and Valuation - Year-to-date, ASYS shares have appreciated by 69.6%, while AMAT shares have gained only 3.2% [14] - The valuation metrics indicate that ASYS is more reasonably priced compared to AMAT, making it a more attractive investment option at this time [16] Conclusion - ASYS is currently viewed as a more compelling investment opportunity compared to AMAT, given its faster momentum in AI-related equipment sales and operational improvements, alongside a more attractive valuation [18][19][20]

Core Viewpoint - Amtech Systems is a small-cap semiconductor equipment maker that plays a crucial role in the artificial intelligence boom, providing essential tools and consumables for advanced chip production [1][9]. Company Performance - Amtech reported a fiscal Q3 revenue of $19.6 million, a 26% increase from the previous quarter, and achieved a profit of $0.06 per share, reversing a prior loss of $0.16 per share [4]. - AI-related sales surged fivefold year-over-year, now accounting for approximately 25% of Thermal Processing Solutions revenue, indicating a shift in AI from a secondary tailwind to a primary growth driver for the company [5]. Market Position and Outlook - Analysts have raised estimates for Amtech, earning it a Zacks Rank 1 (Strong Buy), which has boosted investor confidence and led to a significant increase in ASYS shares [6]. - The demand for AI infrastructure is accelerating, as highlighted by Oracle's earnings report, which indicates that both major players like Nvidia and niche infrastructure companies like Amtech will benefit from this trend [2][9]. Industry Context - Amtech operates through subsidiaries focusing on thermal processing, chemical-mechanical polishing, and advanced chip packaging, which are essential for manufacturing high-performance devices like GPUs and silicon carbide power semiconductors [3]. - The ongoing investment by hyperscalers and enterprises in AI infrastructure is expected to drive further demand for the specialized tools and materials provided by companies like Amtech [9][10].

Core Viewpoint - Amtech Systems (ASYS) has experienced a significant share price increase of 67.1% over the past month, outperforming the Zacks Semiconductor - General industry's decline of 6.7%, primarily due to better-than-expected third-quarter results for fiscal 2025 [1][2]. Financial Performance - The third-quarter revenues reached $19.6 million, exceeding the Zacks Consensus Estimate of $16 million, while the non-GAAP EPS was 6 cents, surpassing the consensus mark of a loss of 8 cents, boosting investor confidence [2][9]. - The Zacks Consensus Estimate for fiscal 2025 is a loss of 6 cents per share, an improvement from a projected loss of 63 cents 60 days ago, with fiscal 2026 earnings estimated at 15 cents per share, indicating a year-over-year growth of 350% [13]. Market Position and Competitors - Amtech Systems has outperformed industry peers such as NVIDIA (NVDA), STMicroelectronics (STM), and Texas Instruments (TXN), with STMicroelectronics and Texas Instruments gaining only 4.7% and 0.7% respectively, while NVIDIA shares declined by 4.8% [3]. - ASYS is currently trading at a forward 12-month price-to-sales (P/S) ratio of 1.42X, significantly lower than the industry's 13.96X and also below competitors like NVIDIA (17.07X), STMicroelectronics (1.85X), and Texas Instruments (8.98X) [9][16]. Growth Opportunities - The advanced semiconductor packaging industry is projected to grow from $51.62 billion in 2025 to $89.89 billion by 2030, with a CAGR of 11.73%, indicating strong long-term prospects for Amtech Systems [6]. - The company has identified advanced packaging, particularly within AI infrastructure, as a significant growth opportunity, with sales of AI-related equipment increasing fivefold year-over-year, contributing to 25% of Thermal Processing Solutions' revenues [7][8]. Strategic Initiatives - Amtech Systems has made substantial progress in restructuring operations to enhance cost efficiency, reducing its manufacturing sites from seven to four and adopting a semi-fabless manufacturing model, resulting in $13 million in annual savings [11]. - The company has proactively adjusted pricing strategies to improve product margins and is focusing on a stronger mix of AI-related equipment and recurring revenues from consumables and services [12]. Conclusion - Amtech Systems is well-positioned for growth, driven by rising demand for advanced packaging and capital equipment, supported by strategic investments and a favorable industry outlook, making it a compelling buying opportunity for investors [17].

Core Insights - Amtech Systems (ASYS) reported strong third-quarter results for fiscal 2025, with revenues of $19.6 million, a 26% increase from the previous quarter, and earnings per share of 6 cents on a non-GAAP basis, compared to a net loss of 16 cents in the prior quarter [1][4]. Revenue Drivers - The primary growth driver was the demand from the artificial intelligence (AI) market, with sales of AI infrastructure equipment increasing fivefold year-over-year, contributing approximately 25% to Thermal Processing Solutions' revenues [2][9]. - Management indicated that bookings during the third quarter suggest sustained strong demand for AI-related products moving forward [2]. Business Segments - Despite the growth in AI, demand for products related to older semiconductor nodes, particularly in automotive and industrial markets, remained weak [3]. - To mitigate this, Amtech is focusing on recurring revenues from consumables, spare parts, and services, which accounted for about 40% of total sales in the third quarter [3]. Cost Management - The company has been actively working on cost reduction, having decreased its manufacturing footprint from 7 sites to 4, and shifting some production to partners, resulting in annual savings of $13 million [4]. Future Outlook - For the fourth quarter of fiscal 2025, Amtech expects revenues between $17 million and $19 million, with growth in AI-related equipment sales anticipated to be the main growth catalyst [4]. Competitive Landscape - Amtech Systems faces competition from larger companies like Applied Materials (AMAT) and Lam Research (LRCX), which are also focusing on AI-related chip packaging [5]. - In the fourth quarter of fiscal 2025, Lam Research reported revenues of $5.17 billion, a 34% year-over-year increase, driven by strong demand for its etch and deposition tools used in AI chip production [5]. - Applied Materials generated revenues of $7.3 billion in the third quarter of fiscal 2025, reflecting a 7.7% year-over-year growth, attributed to demand for its advanced packaging tools for AI chips [6]. Stock Performance and Valuation - Year-to-date, Amtech Systems' shares have increased by 45.5%, outperforming the Zacks Semiconductor - General industry, which grew by 22.8% [7]. - Amtech trades at a forward price-to-sales ratio of 1.15X, significantly lower than the industry average of 13.89X [10]. Earnings Estimates - The Zacks Consensus Estimate for Amtech Systems' fiscal 2025 is a loss of 6 cents per share, which has been revised upward over the past 30 days [13]. - For fiscal 2026, the earnings estimate is 15 cents per share, indicating a year-over-year growth of 350% [13].

Core Viewpoint - Momentum investing focuses on "buying high and selling higher," contrasting with traditional strategies of "buying low and selling high" [1] Group 1: Momentum Investing Characteristics - Momentum investing can be risky as stocks may lose momentum when their valuations exceed future growth potential, leading to potential losses for investors [2] - Investing in bargain stocks that exhibit recent price momentum can be a safer strategy, utilizing tools like the Zacks Momentum Style Score to identify promising stocks [3] Group 2: Amtech Systems (ASYS) Analysis - Amtech Systems (ASYS) has shown significant price momentum, with a four-week price change of 15.7% and a 12-week gain of 31.1%, indicating strong investor interest [4][5] - ASYS has a beta of 1.59, suggesting it moves 59% more than the market, reflecting its fast-paced momentum [5] - The stock has a Momentum Score of B, indicating a favorable entry point for investors looking to capitalize on its momentum [6] Group 3: Earnings Estimates and Valuation - ASYS has received upward revisions in earnings estimates, earning a Zacks Rank 1 (Strong Buy), which typically attracts more investor interest and drives price increases [7] - The stock is currently trading at a Price-to-Sales ratio of 0.93, suggesting it is undervalued, as investors pay only 93 cents for each dollar of sales [7] Group 4: Additional Investment Opportunities - Besides ASYS, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, presenting additional investment opportunities [8]

Financial Data and Key Metrics Changes - The company reported revenue of $19.6 million for the third fiscal quarter of 2025, representing a 26% increase over the prior quarter, but a 27% decrease compared to the same period last year [5][12] - Adjusted EBITDA was $2.2 million, benefiting from a nonrecurring employee retention credit, while normalized gross margin improved to 41.5% from 36.5% in the previous year [5][13] - GAAP net income for the quarter was $100,000 or $0.01 per share, compared to a net loss of $31.8 million or $2.23 per share in the preceding quarter [14] Business Line Data and Key Metrics Changes - The Thermal Processing Solutions segment saw significant growth, particularly in AI-related equipment, which accounted for about 25% of its revenue, with a fivefold increase in revenue from AI equipment year-over-year [6][7] - The Semiconductor Fabrication Solutions segment experienced weak demand for front-end equipment tied to mature node applications, although performance modestly exceeded expectations due to improved demand for consumables [8][9] Market Data and Key Metrics Changes - Revenue growth was primarily driven by strong demand in Asia for reflow ovens used in AI applications, while the mature node semiconductor market continued to show weakness [12] - The company expects continued strength in AI-related equipment sales to partially offset the softness in mature node product lines in the upcoming quarter [15][16] Company Strategy and Development Direction - The company is focused on expanding recurring revenue streams while capitalizing on opportunities in AI infrastructure, with ongoing investments in next-generation semiconductor packaging equipment [7][10] - Structural changes have been made to improve operating leverage, including consolidating manufacturing sites and optimizing the operating model, which are expected to enhance profitability [10][16] Management's Comments on Operating Environment and Future Outlook - Management noted that the near-term environment remains dynamic, with strong demand for AI-related products but weak demand for mature node products [10] - The company anticipates improved operating leverage and adjusted EBITDA margins in the mid-single digits due to previously implemented cost reductions [16] Other Important Information - The company has achieved $13 million in annualized savings through cost reduction initiatives over the past eighteen months [10] - Unrestricted cash and cash equivalents increased to $15.6 million as of June 30, 2025, compared to $11.1 million at the end of the previous fiscal year [15] Q&A Session Summary Question: No questions were raised during the Q&A session - There were no questions from participants during the call, and the session concluded without any inquiries [18]

[Cautionary Statement Regarding Forward-Looking Statements](index=3&type=section&id=Cautionary%20Statement%20Regarding%20Forward-Looking%20Statements) This statement warns that forward-looking statements are subject to risks and uncertainties, and actual results may differ materially - Forward-looking statements are identified by words such as 'may,' 'plan,' 'anticipate,' 'seek,' 'will,' 'expect,' 'intend,' 'estimate,' 'believe,' 'continue,' 'predict,' 'potential,' 'project,' 'should,' 'would,' 'could,' 'likely,' 'future,' 'target,' 'forecast,' 'goal,' 'observe,' and 'strategy' or their negatives[8](index=8&type=chunk) - Key risk factors that could cause actual results to differ materially include future economic conditions, changes in tariffs/trade policies, demand for products/services, execution of growth initiatives, competition, cyclical nature of the semiconductor industry, pricing pressures, new technologies, regulatory developments, litigation, pandemics, cybersecurity incidents, and adverse developments affecting financial institutions[8](index=8&type=chunk) - The Company undertakes no obligation to update or publicly revise any forward-looking statement after the date of this Quarterly Report[10](index=10&type=chunk) [PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents the company's condensed consolidated financial statements and management's discussion and analysis [Item 1. Condensed Consolidated Financial Statements](index=4&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) Unaudited condensed consolidated financial statements are presented for the periods ended June 30, 2025, and September 30, 2024 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets and shareholders' equity decreased from September 2024 to June 2025, mainly due to goodwill impairment | (in millions) | June 30, 2025 (Unaudited) | September 30, 2024 | | :--------------------------------------- | :------------------------ | :------------------- | | **Assets** | | | | Cash and cash equivalents | $15.563 | $11.086 | | Accounts receivable, net | $19.047 | $21.989 | | Inventories | $19.620 | $26.867 | | Total current assets | $57.755 | $64.376 | | Property, Plant and Equipment - Net | $10.445 | $11.647 | | Right-of-Use Assets - Net | $17.856 | $16.596 | | Intangible Assets - Net | $1.135 | $4.004 | | Goodwill | $0.908 | $21.261 | | Total Assets | $89.464 | $118.953 | | **Liabilities and Shareholders' Equity** | | | | Accounts payable | $6.899 | $5.356 | | Contract liabilities | $6.399 | $8.965 | | Total current liabilities | $18.840 | $19.599 | | Total Liabilities | $37.746 | $36.595 | | Total Shareholders' Equity | $51.718 | $82.358 | | Total Liabilities and Shareholders' Equity | $89.464 | $118.953 | - Total Assets decreased by **$29.489 million** (24.8%) from **$118.953 million** at September 30, 2024, to **$89.464 million** at June 30, 2025[12](index=12&type=chunk) - Goodwill saw a significant decrease from **$21.261 million** to **$0.908 million**, reflecting impairment charges[12](index=12&type=chunk) - Total Shareholders' Equity decreased by **$30.640 million** (37.2%) from **$82.358 million** to **$51.718 million**, largely due to an increase in retained deficit[12](index=12&type=chunk) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The company reported a net loss for the nine months ended June 30, 2025, driven by impairment charges, despite a quarterly net income | (in millions, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Revenues, net | $19.557 | $26.749 | $59.522 | $77.102 | | Gross profit | $9.132 | $9.758 | $18.169 | $26.428 | | Operating income (loss) | $0.915 | $0.816 | $(30.328) | $(6.755) | | Goodwill impairment | — | — | $20.353 | $6.370 | | Intangible asset impairment | — | — | $2.569 | $0.430 | | Net income (loss) | $0.106 | $0.438 | $(31.394) | $(7.950) | | Net income (loss) per basic share | $0.01 | $0.03 | $(2.20) | $(0.56) | - Net revenues decreased by **27%** for the three months ended June 30, 2025, and by **23%** for the nine months ended June 30, 2025, compared to the respective prior year periods[13](index=13&type=chunk) - Operating income for the three months ended June 30, 2025, increased to **$0.915 million** from **$0.816 million** in the prior year, while operating loss for the nine months ended June 30, 2025, significantly widened to **$(30.328) million** from **$(6.755) million**[13](index=13&type=chunk) [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) Comprehensive income was reported for the quarter, but a substantial comprehensive loss for the nine months due to net loss | (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :------------------------------ | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Net income (loss) | $0.106 | $0.438 | $(31.394) | $(7.950) | | Foreign currency translation adjustment | $0.239 | $(0.099) | $(0.357) | $0.120 | | Comprehensive income (loss) | $0.345 | $0.339 | $(31.751) | $(7.830) | - Comprehensive income for the three months ended June 30, 2025, was **$0.345 million**, slightly up from **$0.339 million** in the prior year[15](index=15&type=chunk) - Comprehensive loss for the nine months ended June 30, 2025, was **$(31.751) million**, a significant increase from **$(7.830) million** in the prior year, mainly due to the increased net loss[15](index=15&type=chunk) [Condensed Consolidated Statements of Shareholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Equity) Shareholders' equity significantly decreased over nine months due to net loss, partially offset by stock compensation | (in millions) | September 30, 2024 | June 30, 2025 | | :------------------------------ | :----------------- | :------------ | | Common Stock | $0.143 | $0.143 | | Additional Paid-In Capital | $128.466 | $129.577 | | Accumulated Other Comprehensive Loss | $(0.720) | $(1.077) | | Retained Deficit | $(45.531) | $(76.925) | | Total Shareholders' Equity | $82.358 | $51.718 | - Total Shareholders' Equity decreased by **$30.640 million** from **$82.358 million** at September 30, 2024, to **$51.718 million** at June 30, 2025[17](index=17&type=chunk) - The Retained Deficit increased by **$31.394 million**, from **$(45.531) million** to **$(76.925) million**, reflecting the net loss for the period[17](index=17&type=chunk) - Additional Paid-In Capital increased by **$1.111 million**, primarily due to stock compensation expense and stock options exercised[17](index=17&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow decreased, investing activities used less cash,