Teradyne's (TER) long-term growth outlook has strengthened as the company enters a multi-year acceleration driven by multiple growth drivers across semiconductors and robotics, BofA Securities said.

The brokerage said in a Wednesday note that Teradyne is entering a multi-year growth phase, forecasting an 18% compound annual growth rate in sales and a 32% EPS CAGR from 2025 to 2028, marking a sharp turnaround from its previously flat to declining performance.

Key growth drivers include faster process introductions at Taiwan Semiconductor Manufacturing (TSM), greater testing complexity for AI compute and memory chips, a smartphone recovery tied to Apple's (AAPL) 2nm adoption, and increasing robotics demand from Amazon's (AMZN) warehouse upgrades.

BofA raised its 2025-2027 EPS estimates by 14% to 35% and now sees up to $10 in EPS potential by 2028, above management's long-term model of $8.25.

Teradyne's projected EPS rises from $3.52 in 2025 to $6.64 in 2027. Analysts surveyed by FactSet expect $3.42 and $6.32, respectively.

BofA upgraded the stock to buy from underperform and raised its price target to $205 from $145.

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