Shares of Teradyne experienced a remarkable surge of 20% in pre-market trading following the release of its fourth-quarter earnings, which significantly surpassed Wall Street”s forecasts. The automated test equipment manufacturer reported non-GAAP earnings of $1.80 per share, exceeding analysts” estimates of $1.36 by a notable margin of $0.44.
In terms of revenue, Teradyne achieved $1.08 billion, representing a substantial 44% increase compared to the same quarter of the previous year. This growth was primarily attributed to heightened demand stemming from artificial intelligence applications across various sectors including compute, networking, and memory.
Looking ahead, Teradyne”s guidance for the first quarter of 2026 has astonished analysts, forecasting revenues between $1.15 billion and $1.25 billion, significantly higher than the consensus estimate of $966.57 million. The company”s projections for non-GAAP earnings for the first quarter range from $1.89 to $2.25 per share, well above the anticipated $1.25 per share, indicating a potential 61% beat over expectations.
CEO Greg Smith expressed optimism regarding the company”s trajectory, stating, “In 2026, we expect year-over-year growth across all of our businesses, with strong momentum in compute driven by AI.” He highlighted that all three business segments—Semiconductor Test, Product Test, and Robotics—experienced sequential growth.
The demand for AI testing solutions played a crucial role in Teradyne”s quarterly success. The company saw a rise in testing needs particularly related to AI workloads, which has bolstered its position in the high-bandwidth memory testing market, where it commands approximately 50% market share. The new Magnum 7H system, which supports testing for HBM3E and HBM4, began shipping in volume during the third quarter of 2025.
As the first quarter of 2026 approaches, investor sentiment has shifted positively in light of these results. Over the past three months, Teradyne”s stock has gained nearly 34.89%, with a remarkable 124.66% return over the past year. Analysts noted that the company has received 16 positive EPS revisions in the last 90 days, underscoring the optimism surrounding its performance.
Overall, Teradyne”s robust earnings report reflects not only its strong operational performance but also the accelerating demand for AI-related technologies, positioning the company for continued growth in the evolving tech landscape.
