Teradyne's stock experienced a pre-market plunge of 7.19% on Wednesday, following the release of the company's first-quarter 2026 financial results and second-quarter outlook.
The decline was triggered by Teradyne's forecast for a sequential decline in both revenue and adjusted profit for the second quarter, despite reporting first-quarter results that beat analyst estimates. The company expects Q2 revenue between $1.15 billion and $1.25 billion and adjusted EPS of $1.86 to $2.15, representing a drop from the record Q1 results of $1.28 billion in revenue and $2.56 in adjusted EPS.
Investors focused on this quarter-over-quarter deterioration, leading to profit-taking after the stock had surged significantly year-to-date fueled by AI-related optimism. The company's guidance fell short of elevated market expectations tied to the anticipated AI testing super-cycle, even though Teradyne noted that approximately 70% of its revenue is tied to AI-related demand.