By Mackenzie Tatananni

Teradyne shares spiked on Monday after analysts said the maker of semiconductor test equipment had the potential to snap up more market share.

The stock climbed 11% to $132.64, making it the best performer in the S&P 500 and putting it on pace for its highest close since Jan. 20, according to Dow Jones Market Data.

The steep rise came Susquehanna analysts reiterated a Positive rating on the stock and boosted their target price to $200 a share from $133. Including Monday's gains, the higher price target signals potential 51% upside.

The analysts' checks with "key players in the AI compute supply chain" in Taiwan indicate Teradyne is gaining traction at Taiwan Semiconductor Manufacturing, particularly for a process called GPU wafer sort testing.

Taiwan Semi is expected to acquire Teradyne's Stage of Charge testers for the GPU process, while third-party partners that test and package chips are expected to buy from Teradyne starting next year, according to the analysts.

On a broader scale, suppliers of graphics processing units and central processing units are struggling to control the cost of making certain types of chips.

"Testing and packaging, which fall under the back end, are becoming more complex and expensive," the analysts wrote. "This shift is creating a clear opportunity for new methodologies and equipment providers and positioning TER as a key beneficiary."

Susquehanna thinks Teradyne is "actively collaborating with GPU suppliers and TSMC to reduce wafer sort test costs."

While Teradyne is gaining traction at the wafer sort level, Susquehanna expects it to expand into System Level Tests, a testing phase that evaluates a chip's performance under real-world conditions.

Revenue from these wins shouldn't materialize until 2026, the analysts said. However, Teradyne's growing traction "is a positive and incremental development that we believe is not entirely reflected in the current share price," they wrote.

Shares surged in late July when Teradyne posted better-than-expected earnings. Although revenue declined both year over year and sequentially, the second-quarter print demonstrated particular strength in Teradyne's semiconductor test business.

"All in all, we see several drivers within TER's core Semi Test mix that support meaningful EPS growth," Susquehanna wrote.

The analysts' $200 price target represents 25 times projected earnings of $8 a share for this year.

Wall Street is generally positive on the stock. Of 19 analysts tracked by FactSet, 11 rate Teradyne at Buy or the equivalent. Five have Hold ratings and three have Sell ratings.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com

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September 22, 2025 14:04 ET (18:04 GMT)

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