Teradyne TER shares have surged 312.4% in the trailing 12-month period, outperforming the Zacks Computer & Technology sector’s rise of 43.5% and the Zacks Electronics - Miscellaneous Products increase of 68%.
TER shares have also outperformed their peers, which include Advantest Corporation ATEYY, Cohu COHU, and KLA Corporation KLAC. The companies are also expanding their footprint in the AI infrastructure space. Advantest, Cohu, and KLA shares have gained 163.5%, 160.8%, and 132.6%, respectively, in the past year.
The outperformance can be attributed to strong AI-related demand, which is driving significant investments in cloud AI build-out as customers accelerate production of a wide range of AI accelerators, networking, memory and power devices. These factors are helping Teradyne to fend off its competitors from companies like Advantest, Cohu, and KLA.
TER Stock Performance
Image Source: Zacks Investment Research
TER Benefits From Growing AI Infrastructure Demand
Teradyne is benefiting from the growing demand for AI infrastructure, which is driving robust growth across its semiconductor test and robotics divisions. Growth is largely attributed to the accelerating demand for AI and data center technologies, with AI-related demand accounting for nearly 70% of Teradyne’s revenues in the first quarter of 2026, up from about 60% in the previous quarter.
The company’s product innovation is supporting its growth. The company’s introduction, like the Photon 100 platform for silicon photonics and co-packaged optics testing and the Omnyx production board test platform, addresses critical needs in AI data center build-outs. The Photon 100 is expected to contribute to a TAM expansion opportunity that could reach $300 million to $700 million per year over the midterm.
Strategic acquisitions and joint ventures, such as the MultiLane Test Products JV and the acquisition of TestInsight, are enhancing Teradyne’s capabilities in high-speed I/O, data center interconnect testing and design-to-test software.
Teradyne’s SemiTest segment broke the $1 billion revenue threshold for the first time, with compute-related products making up roughly 75% of SoC product revenue. Memory test demand, especially for HBM and DRAM, remains robust, and the company is seeing early indicators of growth in HDD testing driven by AI-fueled data center storage needs. Robotics revenue also saw strong year-over-year growth, with AI-related applications in e-commerce, electronics manufacturing and data centers.
Teradyne Drives Robotics Growth With AI
Teradyne’s Robotics division delivered its fourth consecutive quarter of sequential growth, with first-quarter 2026 robotics revenues up 32% year over year to $91 million. This growth is notable because the first quarter is typically a seasonally weaker quarter. The company’s “one sales team” approach is driving results across verticals, and AI revenue now represents 15% of robotics sales.
The company’s robots are now used in environmental sensing within data centers, and Teradyne recently showcased a complex physical AI work cell in partnership with Generalist at NVIDIA’s GTC event. This demonstrates Teradyne’s ability to innovate and integrate AI-driven robotics into high-growth markets such as e-commerce, electronics manufacturing and semiconductors.
Further expanding its portfolio via partnership, in April 2026, Teradyne Robotics and Flex expanded their collaboration, with Flex both deploying Universal Robots cobots and MiR autonomous mobile robots in its own facilities and manufacturing key robotics components for Teradyne’s customers worldwide.
Teradyne continues to expect its large e-commerce customer to triple its revenue contribution in 2026 compared with 2025, which, if executed, would improve scale and utilization in the Robotics segment.
TER Initiates Positive Q2 Guidance
Teradyne’s expanding portfolio and strong demand for AI-related applications are expected to drive the company’s top-line growth.
For the second quarter of 2026, Teradyne expects revenues in the range of $1.150-$1.250 billion. The Zacks Consensus Estimate for second-quarter 2026 revenues is pegged at $1.22 billion, suggesting an 86.43% year-over-year increase.
Non-GAAP earnings are projected to be in the range of $1.86-$2.15. The consensus mark for earnings is pegged at $1.99 per share, unchanged over the past 30 days. This indicates growth of 249.12% on a year-over-year basis.
Teradyne, Inc. Price and Consensus
Teradyne, Inc. price-consensus-chart | Teradyne, Inc. Quote
TER Trades at a Premium
Teradyne shares are currently overvalued, as suggested by its Value Score of F.
Teradyne stock is trading at a premium with a forward 12-month Price/Sales of 11.38X compared with the Electronics - Miscellaneous Products industry’s 10.29X.
TER Valuation
Image Source: Zacks Investment Research
What Should Investors Do With TER Stock?
Teradyne’s robust, diversified portfolio, which meets the rising demand for AI-driven technologies, is consistently contributing to its growth prospects, driving top-line growth. These factors have justified its premium valuation.
TER stock currently sports a Zacks Rank #1 (Strong Buy), which implies that investors should start accumulating the stock right now. You can see the complete list of today’s Zacks #1 Rank stocks here.
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This article originally published on Zacks Investment Research (zacks.com).