MW Teradyne's stock soars after this 'absolute blowout' forecast that was fueled by AI

By Emily Bary

The company, which makes equipment for testing semiconductors, gives profit guidance that was about 60% above what analysts were expecting

AI is driving demand for Teradyne's products, which help test chips.

Teradyne just issued an earnings forecast so strong that it wasn't even in the neighborhood of what analysts were expecting, and its stock is soaring.

The company makes equipment that tests semiconductors and circuits, and its business seems well exposed to the different categories of artificial-intelligence chips that are seeing momentum lately. In a sparse press release Monday, Teradyne $(TER)$ noted that its latest results reflected "AI-related demand in compute, networking and memory."

For the fourth quarter, Teradyne posted $1.08 billion in revenue and $1.80 in adjusted earnings per share. Analysts were expecting $977 million in revenue and $1.38 in adjusted EPS, with Evercore ISI analyst Vedvati Shrotre noting that the earnings figure was 30% above the consensus view.

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Teradyne beat by even more with its outlook, as the company is targeting $1.15 billion to $1.25 billion in revenue along with $1.89 to $2.25 in adjusted EPS. Analysts were modeling $958 million in revenue as well as $1.34 in EPS. The midpoint of Teradyne's outlook is 61% above what analysts were expecting, Shrotre wrote.

Shares rose 19% in Monday's extended session.

"We were bullish into this report, but.... wow," Cantor Fitzgerald analyst C.J. Muse said in a note to clients. Extrapolating out Teradyne's fourth-quarter profit performance and first-quarter guidance gets to an annualized run rate of about $8 in adjusted earnings per share, he said. That "compares quite favorably" not just to the consensus view for 2026 but also to what analysts had been expecting for 2027, he added. The FactSet consensus is for $5.74 in adjusted earnings per share this year and $6.41 next year.

He called the report "an absolute blowout and one that highlights [Teradyne's] leverage to AI-related strength across networking, compute and memory."

In double-upgrading Teradyne's stock last fall, Bank of America analyst Vivek Arya predicted a multiyear acceleration fueled in part by the "faster pace of new manufacturing process introduction at TSMC," which has been moving to an annual cadence from a prior timespan of two to three years. Additionally, Arya noted "faster adoption and hence greater testing complexity of AI compute and memory," calling out high-bandwidth memory as well as NAND memory chips.

The market for memory and storage has been especially hot lately, as evidenced by recent earnings guidance from NAND player Sandisk $(SNDK)$ that was about 150% ahead of what analysts were projecting.

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Investors will learn more about Teradyne's business drivers when the company hosts its earnings call at 8:30 a.m. Eastern on Tuesday.

-Emily Bary

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February 02, 2026 22:15 ET (03:15 GMT)

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