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Investing.com -- Bank of America double-upgraded Teradyne Inc to Buy from Underperform, saying the chip-testing company is entering a multi-year growth phase powered by rising semiconductor complexity and new opportunities in robotics.
The brokerage lifted its price target to $205 from $145, implying about 17% upside from Wednesday’s close, and raised earnings estimates through 2027 by as much as 35%.
It now expects sales to grow 18% annually and earnings 32% between 2025 and 2028, reversing years of stagnant growth.
BofA said Teradyne’s prospects have improved as TSMC accelerates new chip process introductions and demand grows for testing high-bandwidth memory and AI compute chips.
It also cited a likely rebound in smartphone testing tied to Apple’s 2-nanometer adoption and a robotics upcycle from Amazon’s warehouse upgrades.
Analysts said Teradyne could deliver up to $10 in earnings per share by 2028, above the company’s long-term target of $8.25, and that its valuation remains attractive relative to semiconductor equipment peers.
The company now has “multiple growth cylinders” according to analysts at BofA. Testing demand should strengthen as chip architectures become more complex.
Risks include uneven memory and ASIC orders, dependence on Apple’s 2nm transition, and uncertain timing of Nvidia’s next GPU program.