It takes a lot for artificial-intelligence trade-related companies to impress Wall Street with earnings or guidance these days, but Teradyne has done just that.
Shares of the semiconductor test equipment manufacturer rose 9% to $338.43 on Wednesday after the company late Tuesday reported better-than-expected second-quarter earnings and solid quarterly guidance.
Teradyne posted adjusted earnings of $2.47 a share in the second quarter, up from 57 cents a year ago and well above Wall Street's expectation of $2.09. Revenue soared 104% to $1.33 billion, outstripping both the company's guidance and the analyst consensus call for $1.22 billion, according to FactSet.
Teradyne said a big reason for the massive revenue growth was record memory revenue driven by continued strength in DRAM memory testing and "resurgence" in NAND memory "final testing."
But Teradyne wasn't done and issued third-quarter guidance that did the seemingly impossible in the AI age -- make Wall Street swoon.
The company expects third-quarter adjusted earnings of $1.85 to $2.15 a share on revenue between $1.2 billion and $1.3 billion. That blew away Wall Street's third-quarter forecast for earnings of $1.56 a share and revenue of $1.06 billion, according to FactSet.
"In the short term, our Q3 guidance reflects robust AI-related demand. Looking further ahead, rapid increase in wafer fab equipment investment sets the stage for continued growth in 2027 and beyond," Teradyne CEO Greg Smith said in a press release.
Smith added that Teradyne is working to capture test and robotics opportunities from wafer to AI data centers.
Morgan Stanley analyst Shane Brett on Tuesday praised the earnings report as Teradyne delivered another "beat and raise." Brett wrote the earnings report shows "meaningful upside" and strengthens its thesis on the shares.
Goldman Sachs on Tuesday also cheered Teradyne's earnings and maintained a Buy rating and $465 price target on the stock.
The firm wrote that it fully expected the stock to trade higher as the results and outlook came in well above Wall Street expectations, besting already bullish investor sentiment.