Teradyne's stock price soared 5.06% during intraday trading on Tuesday, marking a significant upward movement for the semiconductor testing equipment maker.

The rally is attributed to the company's better-than-expected financial results and a substantial price target upgrade by TD Cowen from $325 to $400. A key driver is the milestone where AI test revenue surpassed 70% of total revenue for the first time, signaling explosive growth in demand for AI semiconductor testing.

Further bolstering investor confidence is the company's record-high full-year revenue guidance, projecting 30% to 40% year-over-year growth. This outlook is supported by triple demand tailwinds from AI chips, HBM memory, and advanced packaging, with the company's testing platform reportedly in a supply-constrained state, providing fundamental support for the stock's strength.