Teradyne forecasts upbeat quarterly results on AI-driven demand

Feb 2 (Reuters) - Teradyne ⁠forecast first-quarter revenue ⁠and ‍profit above Wall Street estimates on Monday, driven by multibillion-dollar investments by technology companies ‍on data center expansion to enable AI capabilities, ​sending its shares up over 20% in extended trading.

The increase in ​complexity of AI compute and memory chips and an acceleration in production timelines has prompted chipmakers to increase capital spending on ​testing equipment, benefiting Teradyne.

Its equipment is used to test the quality and reliability of semiconductors. Analysts ​have noted that improving utilization rates at major chip factories often precede new ‌orders for testing equipment.

"In 2026, we expect year-over-year growth across all of our businesses, with ​strong momentum in compute driven ⁠by AI," CEO Greg Smith said.

Teradyne provides automated test equipment for a range of ‌chips, from complex SOCs used in smartphones and AI data centers to memory chips.

The company, with customers that include ‌Qualcomm and Texas Instruments, forecast first-quarter revenue between $1.15 billion and $1.25 billion, ‌ahead of analysts' average estimate of $934.5 million, according to data compiled by LSEG.

It sees adjusted earnings per share in the range ‍of $1.89 to $2.25 for the quarter, ahead of an average estimate of $1.26.

Teradyne posted fourth-quarter revenue ⁠of $1.08 billion, beating an estimate of $973.2 million, fueled by AI-related demand in compute, networking and memory within its semi test business.

(Reporting by Juby Babu in Mexico City; Editing by Krishna Chandra Eluri)

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