Alpha &amp; Omega Semiconductor Ltd (NASDAQ:AOSL) shares are tanking on Thursday. The company reported a third-quarter earnings loss in the after-market session on Wednesday.



<h2>Earnings Snapshot</h2>



Alpha &amp; Omega Semiconductor reported:



<ul>
<li>Adjusted loss per share of 28 cents, better than the consensus loss per share of 34 cents.</li>



<li>Revenue of $163.8 million also slightly exceeded expectations of $160.0 million.</li>



<li>Gross margins weakened, with GAAP gross margin at 21.1% and adjusted margins at 21.7%, both slightly lower than the prior quarter and the year-ago period.</li>



<li>Cash usage from operations was $8.3 million, broadly in line with the previous quarter, while cash and equivalents stood at $190.3 million at quarter-end.</li>
</ul>



CEO Stephen Chang said March-quarter results came in slightly above the midpoint of guidance, supported by strength in Advanced Computing—particularly AI, servers, and graphics—as well as continued momentum with a key U.S. smartphone customer.



He noted that while seasonal weakness in PCs and softness in certain consumer segments persisted, higher-performance applications and a better product mix are becoming increasingly important drivers.



Management believes both the December and March quarters likely represented near-term lows in revenue and margins, with early signs of improvement expected in the June quarter as mix and high-performance demand strengthen.



<h2>Outlook</h2>



For the fourth quarter, the company guided revenue of $158–$178 million, compared with the $171 million Street estimate.



Chang added that although visibility into the second half of calendar 2026 remains limited due to uncertainty in memory pricing and supply, the company still expects modest full-year growth and sees its R&amp;D investments positioning it for stronger acceleration from 2027 onward as new programs ramp.



Price Action: AOSL shares are down 26.88% at $36.07 at the last check on Thursday.



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Alpha & Omega Semiconductor shares fell 26% following mixed Q3 results, reporting an adjusted loss per share of 28 cents and revenue of $163.8 million. The company expects Q4 revenue between $158–$178 million, slightly below analyst estimates. CEO Stephen Chang noted challenges in consumer segments but highlighted strength in advanced computing and a key U.S. smartphone customer. Management anticipates near-term lows in revenue and margins, with signs of improvement expected in the June quarter. AOSL shares are currently priced at $36.07.

Why Alpha & Omega Semiconductor Shares Are Dipping Today?