Teradyne shares soar as AI demand drives strong earnings

Investing.com -- Teradyne Inc (NASDAQ: TER) shares surged 19.4% in after-hours trading Monday after the semiconductor test equipment maker reported fourth-quarter earnings that significantly exceeded analyst expectations, driven by strong artificial intelligence-related demand.

The company reported adjusted earnings per share of $1.80 for the fourth quarter, handily beating the analyst estimate of $1.36. Revenue jumped to $1.08 billion, well above the consensus estimate of $969.33 million and representing a 44% increase YoY and 41% growth sequentially from the third quarter.

"Our Q4 results were above the high end of our guidance range, fueled by AI-related demand in compute, networking and memory within our Semi Test business," said Teradyne CEO Greg Smith. "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."

The company's outlook was equally impressive, with first-quarter 2026 guidance significantly above Wall Street expectations. Teradyne forecasts adjusted EPS of $1.89 to $2.25, well above the consensus of $1.25, and revenue between $1.15 billion and $1.25 billion, substantially higher than the $942.3 million analysts had expected.

Semiconductor Test, the company's largest segment, generated $883 million in revenue during the quarter, while Product Test and Robotics contributed $110 million and $89 million, respectively.

For the full year 2025, Teradyne reported revenue of $3.19 billion, up 13% from 2024, with adjusted earnings of $3.96 per share compared to $3.22 in the previous year.

"In 2026, we expect year-over-year growth across all of our businesses, with strong momentum in compute driven by AI," Smith added, suggesting the AI-related demand surge that propelled the fourth quarter results is likely to continue.

You May Also Be Interested In

• Broadcom results, guidance beat on soaring AI chip sales; stock slips after hours
• Jefferies, UBS downgrade Victoria's Secret as rally leaves limited upside
• BeWhere acquires SecureQuip Systems for $789,000 in cash