Keysight Technologies' stock soared 19.20% during early trading on Tuesday, driven by the company's better-than-expected fiscal first-quarter results and robust second-quarter outlook.

The electronics test equipment manufacturer reported adjusted earnings per share of $2.17, beating the consensus estimate of $2.00, while revenue increased 23% year-over-year to $1.6 billion, surpassing the estimated $1.54 billion. The company's communications solutions group revenue grew 27%, and its electronic industrial solutions group revenue rose 15%.

Investor sentiment was further boosted by Keysight's second-quarter guidance, which forecast adjusted earnings per share between $2.27 and $2.33 and revenue in the range of $1.69 billion to $1.71 billion, both well above analyst expectations. The strong performance and outlook are attributed to sustained demand from data centers expanding to support artificial intelligence workloads, with management noting that the AI boom continues to drive demand for its products.

Additionally, several brokerages raised their price targets on Keysight following the earnings report, reflecting increased optimism about the company's growth prospects fueled by AI infrastructure investments and higher defense spending.