TLDR
- Teradyne stock surged 20% in pre-market trading after reporting Q4 earnings that beat analyst estimates by a wide margin.
- The company posted non-GAAP earnings of $1.80 per share, crushing the $1.36 consensus by $0.44 per share.
- Q4 revenue reached $1.08B, representing a 44% jump from the prior year period.
- First quarter guidance came in well ahead of expectations at $1.15B to $1.25B versus the $966.57M estimate.
- CEO Greg Smith cited strong AI-driven demand in compute, networking, and memory testing as key growth drivers.
Teradyne stock posted a 20% gain in pre-market activity Tuesday following a stellar quarterly report. The automated test equipment manufacturer exceeded Wall Street forecasts across all key metrics.
Fourth quarter revenue totaled $1.08B, marking a 44% increase year-over-year. The figure easily topped analyst expectations of $969.33M. Non-GAAP earnings came in at $1.80 per share compared to the $1.36 consensus estimate.
GAAP net income for the quarter reached $257.2M, or $1.63 per share. The strong results reflected growth across every business segment. Semiconductor Test generated $883M in revenue, Product Test added $110M, and Robotics contributed $89M.
Broad-Based Strength Across Business Units
CEO Greg Smith emphasized the company’s momentum across all divisions. “Across all of our business groups – Semi Test, Product Test, and Robotics – we experienced sequential growth, and at the company level we achieved 13% growth in 2025,” Smith noted.
Artificial intelligence applications fueled much of the demand. The company saw increased orders for testing equipment in compute, networking, and memory sectors related to AI infrastructure.
Teradyne maintains a commanding position in high-bandwidth memory testing. The company holds approximately 50% market share in the HBM segment. Its Magnum 7H platform supports testing for HBM3E and HBM4, with future upgrade paths to HBM4E and HBM5.
The company began shipping Magnum 7H units in volume during Q3 2025. As HBM technology advances, testing requirements become more complex, creating opportunities for specialized equipment providers.
First Quarter Outlook Exceeds Expectations
Teradyne’s Q1 2026 guidance surprised investors with its strength. The company projects revenue between $1.15B and $1.25B, well above the $966.57M consensus forecast.
Non-GAAP earnings per share for the first quarter are expected to land between $1.89 and $2.25. Analysts had been modeling $1.25 per share. GAAP earnings guidance ranges from $1.82 to $2.19 per diluted share.
Smith expressed optimism about the year ahead. “In 2026, we expect year-over-year growth across all of our businesses, with strong momentum in compute driven by AI,” he stated.
Analyst Perspectives and Stock Performance
Shares closed at $249.57 on Monday before the pre-market rally. The stock has climbed 34.89% over the past three months and 124.66% over the trailing 12-month period.
Wall Street analysts have responded positively to the company’s performance. Teradyne received 16 upward EPS revisions in the last 90 days with no downward revisions.
Michael Del Monte highlighted the company’s HBM market position. He noted that Teradyne could expand its already substantial market share as testing complexity increases for next-generation memory products.
Green Mage Capital pointed to management’s 2028 EPS targets of $8 to $9.50. Based on a 25x earnings multiple, the analyst views current valuation as fair but sees potential upside if growth catalysts materialize.
The stock carries a quant rating of Hold, with momentum and profitability receiving the highest marks among evaluation categories.
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