What Happened?
Shares of semiconductor testing company Teradyne (NASDAQ: TER) jumped 9.7% in the morning session after Susquehanna Financial raised its price target on the stock to $200 from $133, citing a promising growth outlook.
The firm's optimism centered on Teradyne's growing collaboration with semiconductor giant TSMC, especially in the GPU wafer sort testing arena. Susquehanna's analysis pointed to substantial contributions from this partnership materializing by 2026. This bullish view arrived amid a broader rally for semiconductor equipment suppliers, which were in high demand after an upgrade for industry peer ASML boosted investor confidence in a potential cyclical recovery for the sector. The significant price target increase helped make Teradyne a leading gainer in the S&P 500 during the session.
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What Is The Market Telling Us
Teradyne’s shares are very volatile and have had 22 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 biggest move we wrote about over the last year was about 2 months ago when the stock gained 21.1% on the news that the company reported better-than-expected second-quarter financial results and provided a strong third-quarter forecast, driven by robust demand for its artificial intelligence (AI) chip testing equipment.
The semiconductor test equipment manufacturer posted revenue of $651.8 million and adjusted earnings of 57 cents per share, both of which topped analyst expectations. Growth was primarily fueled by its core chip testing division, as demand for System-on-a-Chip (SoC) components for AI applications surged. This strength in AI was significant enough to offset weakness in the automotive and industrial sectors. Looking ahead, Teradyne’s management provided an optimistic outlook, forecasting third-quarter revenue between $710 million and $770 million, which suggested continued momentum.
Teradyne is up 5.2% since the beginning of the year, and at $133.19 per share, it is trading close to its 52-week high of $140 from January 2025. Investors who bought $1,000 worth of Teradyne’s shares 5 years ago would now be looking at an investment worth $1,740.
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