What Happened?
Shares of semiconductor testing company Teradyne (NASDAQ: TER) jumped 6.4% in the afternoon session after Stifel upgraded the chip testing equipment maker to a "Buy" from a "Hold" rating and raised its price target. Analyst Brian Chin increased the price target to $225 from $162, noting stronger long-term growth prospects. The firm highlighted what it called an underappreciated position for the company in AI networking. The upgrade was based on a belief that a “narrative shift, revenue shift, and optionality in AI compute [are] too important to ignore.” Stifel expected growth to accelerate given a favorable, structural shift in Teradyne's test revenue composition, even before considering potential share gains in the AI GPU and ASIC market.
The shares closed the day at $189.94, up 5.7% from previous close.
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What Is The Market Telling Us
Teradyne’s shares are very volatile and have had 29 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 8 days ago when the stock gained 4.6% on the news that renewed enthusiasm for Alphabet reinvigorated the artificial intelligence trade, propelling a market rebound heading into the Thanksgiving holiday. The Nasdaq index jumped 2.6% and the S&P 500 gained 1.6%, driven by a 5% rally in Alphabet following the announcement of its upgraded Gemini 3 AI model. This optimism spilled over into the broader tech sector, lifting shares of Broadcom, Micron, and Palantir significantly. The rally built on momentum from the previous trading session, sparked by the New York Fed president keeping the door open for a December interest rate cut.
Teradyne is up 51.1% since the beginning of the year, and at $191.29 per share, has set a new 52-week high. Investors who bought $1,000 worth of Teradyne’s shares 5 years ago would now be looking at an investment worth $1,679.
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