'Market surprise': Teradyne shares rise 9% to record after strong reporting

Semiconductor and electronic circuit testing equipment maker Teradyne reported fourth-quarter revenue and earnings that exceeded analysts' expectations. Sales exceeded $1 billion for the first time since 2021. The forecast for the current quarter also turned out to be better than Wall Street estimates. Against this background, Teradyne's shares rose by 9%.

Teradyne reported fourth quarter 2025 revenue of $1.08 billion and adjusted earnings per share (EPS) of $1.8, the company said. Analysts were expecting $977 million in revenue and $1.38 in adjusted earnings, respectively, MarketWatch reported. Evercore ISI analyst Vedvati Shrotre noted that earnings came in 30% above the consensus forecast, the publication reported.

The company beat expectations on its outlook for the current period as well. Teradyne expects revenue in the range of $1.15 billion to $1.25 billion and adjusted EPS of $1.89 to $2.25, MarketWatch writes. Analysts had only forecast $958 million and $1.34 EPS. The midpoint of Teradyne's guidance range is 61% higher than market expectations, Schrotra said.

Teradyne's business is benefiting from growth in various categories of artificial intelligence chips, demand for which is now accelerating, MarketWatch clarifies . Teradyne said the latest results reflect "AI-related demand in the compute, networking and memory segments."

"We were optimistic before the report, but ... wow," Cantor Fitzgerald analyst Xi Jay Mewes wrote(quoted by MarketWatch). He estimated that if you extrapolate fourth-quarter earnings and first-quarter guidance, the annualized pace would be about $8 in adjusted earnings per share. That looks "very compelling" not only compared to the consensus forecast for 2026, but also to what analysts expected the company to deliver in 2027. According to FactSet, the consensus is $5.74 EPS this year and $6.41 next year, MarketWatch adds .

Muise called the report "a complete surprise to the market," noting that Teradyne's business is very much benefiting from growth related to artificial intelligence, primarily in the networking, computing and memory segments.

Even last fall, Bank of America analyst Vivek Arya, who sharply upgraded Teradyne's stock rating, said the company was poised for accelerated growth for years to come. In addition, Arya noted that AI computing and memory solutions are spreading faster and faster, and the chips themselves are becoming more complex. Because of this, testing requirements are increasing, especially in the high-speed memory and NAND (a type of semiconductor memory) segments.

Teradyne shares, given Tuesday's surge, are now worth 42% more than they were at the start of 2026. Over the past 12 months, they are up 147%. Most analysts advise buying the company's securities: they have 11 Buy ratings and two Overweight ratings out of 20 combined, MarketWatch shows. Another four recommend Hold, while three recommend Sell (one Sell and two Underweight).

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