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Advanced Energy Lifts Revenue 50% on AI Demand

The power-conversion equipment maker posted strong third-quarter results as demand from semiconductor and data center customers accelerated.

Updated on Nov. 2, 2026 in Manufacturing

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Advanced Energy Industries grew third-quarter revenue 50% to about $696 million as AI and data center demand lifted its profit, with shares rising about 10% after hours. AI Illustration. Upload story photo >

Advanced Energy Industries grew third-quarter revenue 50% year over year to about $696 million, and GAAP earnings per share more than doubled to $2.80. Shares rose about 10% in early after-hours trading.

Why it matters

The results show how demand tied to AI spending is flowing through to profit at suppliers of precise power equipment. Investors and manufacturers watching chip-making and data center buildouts may see this as an indicator of near-term industrial capacity needs.

Data center computing revenue rose 49% year over year while operating expenses grew 17%, a gap that drove the margin expansion. Inventory has climbed 57% since December, and operating cash flow covered only slightly more than half of net income this quarter.

The players

Advanced Energy Industries

Advanced Energy Industries is a Colorado-based manufacturer of precision power conversion products used in semiconductor equipment, industrial processes, and data center computing.

The details

Operating expenses rose far more slowly than revenue, so most of the additional sales dollars reached profit. The company is building inventory to meet demand and ramping production at its factory in Thailand, while a higher tax rate kept net income from growing as fast as operating income.

Timeline

  1. Third quarter of 2026: revenue and earnings growth reported.

  2. December 2025: baseline inventory level before a 57% increase.

  3. Fourth quarter of 2026: revenue guidance of $710 million to $760 million.

  4. Next quarter: inventory is expected to begin converting back into cash.

Market Landscape

Advanced Energy's gains reflect a broader buildout in AI infrastructure, where both AI servers and advanced chip-making tools require precise power conversion. The company's expanding semiconductor and data center revenue places it squarely in the middle of that spending cycle.

Strong demand for AI infrastructure equipment can translate into more stable supplier pricing and delivery schedules for manufacturers that depend on these components. Customers buying power conversion products should watch whether the company's inventory build keeps pace with orders.

The takeaway

The quarter demonstrates how sharply AI-linked demand can lift profit margins when a supplier's costs grow more slowly than its sales. Watching whether inventory converts to cash in the coming quarter will show whether that demand is holding.

What happens next

Inventory is expected to start converting back into cash next quarter, and fourth-quarter revenue guidance is $710 million to $760 million.

Further reading

For broader context on factory output and industrial demand, see Manufacturing.