What Happened?
Shares of electronic measurement provider Keysight (NYSE: KEYS) jumped 7.1% in the morning session after the company reported better-than-expected third-quarter 2025 results and provided a strong forecast for the upcoming quarter. The company posted revenue of $1.42 billion and an adjusted EPS of $1.91, beating Wall Street’s expectations on both fronts. However, the key driver for the positive sentiment was its optimistic outlook. Management guided for fourth-quarter revenue of around $1.54 billion, which was significantly higher than analysts had projected. This strong guidance suggested healthy demand for its electronic measurement products, leading investors to overlook concerns about the decline in operating and free cash flow margins during the quarter.
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What Is The Market Telling Us
Keysight’s shares are not very volatile and have only had 8 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was about 2 months ago when the stock dropped 5.3% on the news that the U.S. threatened to impose "massive increases" to tariffs on China in response to new export controls from Beijing. The potential countermeasures follow China's decision to place new restrictions on the export of strategic minerals and related products, including rare earths, which are critical for the defense, semiconductor, and manufacturing industries. This escalation in the economic competition between the two largest global economies is fueling investor anxiety. The new tariff threats raise concerns about disruptions to global supply chains, increased material costs for manufacturers, and a potential drag on an already sluggish economy. Industrial companies are particularly sensitive to these developments as they are often cyclical and heavily reliant on international trade.
Keysight is up 17.5% since the beginning of the year, and at $189.02 per share, has set a new 52-week high. Investors who bought $1,000 worth of Keysight’s shares 5 years ago would now be looking at an investment worth $1,595.
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