Company Reports

Teradyne's strong second-quarter results came in well above guidance and it raised its guidance for the second half of 2026. Sales rose 104% year over year to $1.33 billion. The implied 2026 full-year revenue guide came up more than 10% from last quarter, now implying 60% growth at the midpoint.

Teradyne is a heavyweight supplier of automated test equipment for semiconductors, boasting market-leading capabilities that run the gamut of chips. It is one of two companies worldwide that can produce testers for the most cutting-edge semiconductors, thanks to robust engineering talent across hardware and software and a structural lead in organic investment. The firm is a vital partner to chipmakers across the industry and has impressively strong relationships with Apple and Taiwan Semiconductor. Teradyne’s market leadership exhibits itself in terrific margins, strong returns on invested capital, and a high market share. We give the firm a wide economic moat rating.

Teradyne reported stellar first-quarter results and second-quarter guidance. March-quarter sales rose 87% year over year to $1.3 billion, and June quarter sales guidance of $1.2 billion implies 84% year over year growth. Shares fell 15% intraday, likely due to soft second-half guidance.

Teradyne is a heavyweight supplier of automated test equipment for semiconductors, boasting market-leading capabilities that run the gamut of chips. It is one of two companies worldwide that can produce testers for the most cutting-edge semiconductors, thanks to robust engineering talent across hardware and software and a structural lead in organic investment. The firm is a vital partner to chipmakers across the industry and has impressively strong relationships with Apple and Taiwan Semiconductor. Teradyne’s market leadership exhibits itself in terrific margins, strong returns on invested capital, and a high market share. We give the firm a wide economic moat rating.

Teradyne's fourth-quarter results were strong, and guidance into 2026 was even more impressive. First-quarter revenue guidance was nearly 25% above FactSet consensus estimates, and Teradyne's updated long-term financial model implies significant share gains in compute chip testing.

Teradyne is a heavyweight supplier of automated test equipment for semiconductors, boasting market-leading capabilities that run the gamut of chips. It is one of two companies worldwide that can produce testers for the most cutting-edge semiconductors, thanks to robust engineering talent across hardware and software and a structural lead in organic investment. The firm is a vital partner to chipmakers across the industry and has impressively strong relationships with Apple and Taiwan Semiconductor. Teradyne’s market leadership exhibits itself in terrific margins, strong returns on invested capital, and a high market share. We give the firm a wide economic moat rating.

Teradyne's third-quarter results came in at the high ends of guidance, with sales rising 4% year over year to $769 million. Fourth-quarter guidance for 25% sequential sales growth massively exceeded FactSet consensus expectations, which management attributed to strong artificial intelligence demand.

Teradyne is a heavyweight supplier of automated test equipment for semiconductors, boasting market-leading capabilities that run the gamut of chips. It is one of two companies worldwide that can produce testers for the most cutting-edge semiconductors, thanks to robust engineering talent across hardware and software and a structural lead in organic investment. The firm is a vital partner to chipmakers across the industry and has impressively strong relationships with Apple and Taiwan Semiconductor. Teradyne’s market leadership exhibits itself in terrific margins, strong returns on invested capital, and a high market share. We give the firm a wide economic moat rating.

Teradyne is a heavyweight supplier of automated test equipment for semiconductors, boasting market-leading capabilities that run the gamut of chips. It is one of two companies worldwide that can produce testers for the most cutting-edge semiconductors, thanks to robust engineering talent across hardware and software and a structural lead in organic investment. The firm is a vital partner to chipmakers across the industry and has impressively strong relationships with Apple and Taiwan Semiconductor. Teradyne’s market leadership exhibits itself in terrific margins, strong returns on invested capital, and a high market share. We give the firm a wide economic moat rating.

Teradyne's second-quarter results met management guidance. Sales declined 11% year over year and 5% sequentially to $652 million. Third-quarter guidance implies a return to both year-over-year and sequential revenue growth, to a midpoint of $740 million.

Teradyne's first-quarter results met or beat management guidance, highlighted by sales rising 14% year over year to $686 million. Guidance for the second quarter fit with expectations given at the firm's March 11 investor day and imply a weak quarter well below typical seasonality.

Teradyne is a heavyweight supplier of automated test equipment for semiconductors, boasting market-leading capabilities that run the gamut of chips. It is one of two companies worldwide that can produce testers for the most cutting-edge semiconductors, thanks to robust engineering talent across hardware and software and a structural lead in organic investment. The firm is a vital partner to chipmakers across the industry and has impressively strong relationships with Apple and Taiwan Semiconductor. Teradyne’s market leadership exhibits itself in terrific margins, strong returns on invested capital, and a high market share. We give the firm a wide economic moat rating.

Wide-moat Teradyne held its investor day, overshadowed by escalating concerns over trade restrictions, particularly in the semiconductor industry, a core market for the firm’s automated test equipment segment. We attribute the 17% decline in stock price to a combination of factors including lowered SemiTest growth expectations for 2025 and heightened market concerns over tariffs. We’ve recently observed the same in other semiconductor stocks as well. Teradyne shared that while some projects would experience delays and capital expenditure reviews, it has not seen order cancelations yet. Management noted that the current expected impact is for a slowdown in the second quarter (now expecting flat to negative 10% sequential growth), which is pressuring 2025 growth to mid-single digits (down from midteens). While management guided for the “low end” of their previous 2026 guidance range, we believe current trends also increase the likelihood of a potential guidance reductions for 2026.

Teradyne is a heavyweight supplier of automated test equipment for semiconductors, boasting market-leading capabilities that run the gamut of chips. It is one of two companies worldwide that can produce testers for the most cutting-edge semiconductors, thanks to robust engineering talent across hardware and software and a structural lead in organic investment. The firm is a vital partner to chipmakers across the industry and has impressively strong relationships with Apple and Taiwan Semiconductor. Teradyne’s market leadership exhibits itself in terrific margins, strong returns on invested capital, and a high market share. We give the firm a wide economic moat rating.

Teradyne's fourth-quarter sales rose 12% year over year and 2% sequentially to $753 million. Management guided to mid-teens revenue growth in the first quarter and 2025 and provided a new long-term model including a midpoint target of 15% revenue growth through 2028.

Teradyne is a heavyweight supplier of automated test equipment for semiconductors, boasting market-leading capabilities that run the gamut of chips. It is one of two companies worldwide that can produce testers for the most cutting-edge semiconductors, thanks to robust engineering talent across hardware and software and a structural lead in organic investment. The firm is a vital partner to chipmakers across the industry and has impressively strong relationships with Apple and Taiwan Semiconductor. Teradyne’s market leadership exhibits itself in terrific margins, strong returns on invested capital, and a high market share. We give the firm a wide economic moat rating.

We maintain our $135 fair value estimate for shares of wide-moat Teradyne as our long-term recovery thesis is intact following third-quarter results. Teradyne’s revenue sits well below its 2021 peak, especially for the primary business in semiconductor testing. We don’t expect revenue to return to historical levels until 2026, with a two-year rebound ahead. Third-quarter results and fourth-quarter guidance were positive and fit our thesis. We believe Teradyne is primed for strong growth in 2025, especially in chip testing after three years of depressed sales. The shares are down about 10% in Oct. 24 intraday trading, however, which we attribute to some analyst skittishness on the strength of growth in 2025. Our own estimates are below FactSet consensus but still imply robust growth. With the ongoing selloff, we see the shares as nicely undervalued.

Teradyne is a heavyweight supplier of automated test equipment for semiconductors, boasting market-leading capabilities that run the gamut of chips. It is one of two companies worldwide that can produce testers for the most cutting-edge semiconductors, thanks to robust engineering talent across hardware and software and a structural lead in organic investment. The firm is a vital partner to chipmakers across the industry and has an impressively strong relationship with Apple and Taiwan Semiconductor. Teradyne’s market leadership exhibits itself in industry-leading margins, strong returns on invested capital, and a top market share. We give the firm a wide economic moat rating.

We maintain our $135 fair value estimate for shares of wide-moat Teradyne as we believe our long-term thesis is bearing out following second-quarter results. Most of Teradyne’s end markets remain soft in 2024, including its bellwether smartphone chip testing market, which has been depressed since 2022. We believe many of these markets will turn up in 2025, and continue to model a strong two-year recovery through 2026. Teradyne has seen positive results in 2024 from AI chip investment, particularly from memory and networking customers. This AI demand drove revenue above our expectations in the second quarter. Shares sold off as much as 15% following results, which we attribute to an overreaction to third-quarter guidance implying a modest sequential sales decline. We see shares as fairly valued.

We affirm our $135 fair value estimate for wide-moat Teradyne as we maintain our longer-term recovery thesis following good first-quarter results. Teradyne’s March-quarter results and second-quarter guidance beat our expectations, but management continues to issue conservative guidance for the back half of 2024. We’re pleased with Teradyne’s ability to benefit from generative artificial intelligence chip spending, but we think its core mobile phone chip market will be weak through the rest of the year. We believe Teradyne’s current sales levels are well below what we consider normal demand, but we don’t expect a significant rebound in 2024. We’ve also lost some confidence in management’s outlook for a longer-term recovery and forecast Teradyne to miss its 2026 sales target. We continue to think shares are undervalued but don’t see meaningful catalysts for the stock until 2025.