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NORTH READING - Teradyne, Inc. (NASDAQ:TER) shares surged 19% after the semiconductor test equipment maker reported better-than-expected third-quarter results and issued fourth-quarter guidance that significantly exceeded analyst expectations, driven by robust demand for artificial intelligence testing solutions.
The company reported third-quarter adjusted earnings of $0.85 per share, beating analyst estimates of $0.79, while revenue reached $769 million, surpassing the consensus estimate of $743.78 million and representing a 4% increase YoY. Semiconductor Test revenue of $606 million drove the outperformance, with particularly strong demand for AI-related testing applications.
Teradyne’s stock jumped 19% following the announcement as investors responded enthusiastically to the company’s fourth-quarter outlook, which substantially exceeded Wall Street expectations. The company forecasts fourth-quarter revenue between $920 million and $1 billion, well above the analyst consensus of $815.7 million. Fourth-quarter adjusted earnings guidance of $1.20 to $1.46 per share also topped the $1.03 consensus estimate.
"Our Semiconductor Test Group delivered third quarter sales that exceeded expectations, driving company sales and profit to the high end of our Q3 guidance range," said Teradyne CEO Greg Smith. "Growth was driven primarily by System-on-a-Chip (SOC) solutions for artificial intelligence applications and strong performance in memory."
The midpoint of Teradyne’s fourth-quarter revenue guidance ($960 million) represents a 25% sequential increase from the third quarter and a 27% jump compared to the fourth quarter of 2024. The company noted that AI-related test demand remains robust across compute, networking, and memory segments, suggesting continued momentum into 2026.
Teradyne’s results highlight the growing importance of testing equipment in the AI supply chain as chipmakers race to develop and deploy increasingly complex processors for artificial intelligence applications.
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