Advanced Energy Industries (AEIS)

The sleeper story is that cash flow collapsed 65% while earnings held steady, a massive earnings quality red flag the Street is missing while celebrating AI-driven data center growth. Yes, data center hit records and doubled year-over-year, but Paul admitted margins are still below corporate average, making this growth actually dilutive. The binding constraint is semiconductor production ramp timing: 350 qual units shipped but production keeps slipping from 'second half' to 'late 2025 and early 2026', meaning the payoff is 6+ months later than promised. Most revealing quote: 'Although macro visibility in the second half is limited' which is Steve finally admitting they can't see past Q2 despite maintaining full-year growth targets. My view changes if they deliver 40% gross margins in Q3 or book $50M+ in semicap production orders.