Cantor Fitzgerald on Wednesday raised its price target for Teradyne (NASDAQ:TER) to $330.00 from $270.00 while retaining an Overweight rating on the stock. Teradyne shares were trading at $272.10 at the time, a level Cantor said still implies roughly 21% upside to its new target. InvestingPro data referenced by market observers also shows the stock trading well above its Fair Value and carrying a price-to-earnings ratio of 81.5.
The brokerage firm attributed the upward revision to what it described as a "blow out guide" for Teradyne's first quarter of 2026. Cantor highlighted a material shift in the company's revenue mix toward artificial intelligence-related products and services. In the fourth quarter of 2025, AI-related business represented over 60% of Teradyne's total revenues, and Cantor expects that proportion to climb to more than 70% in the first quarter of 2026. That change in mix has coincided with a pronounced rally in the stock, which returned 154.51% over the past year.
Teradyne has also revised its long-term planning assumptions, updating a target model that envisions diluted earnings per share in the range of $9.25 to $11.00 over time. Those EPS targets underpin a long-term revenue compound annual growth rate objective between 15% and 25%. The company reported diluted EPS of $3.47 recently, while consensus analyst projections point to $5.27 in EPS for fiscal year 2026. Cantor described near-term visibility as strong, citing healthy bookings and an improved backlog relative to the same point a year earlier.
Management cautioned, however, that revenue will likely be uneven through 2026. Cantor noted that Teradyne expects a first-half concentration of revenue followed by meaningful declines in the second half, effectively reversing the 58%/42% first-half/second-half mix the company experienced in 2025. The firm also flagged several potential growth catalysts and sources of demand for Teradyne's test equipment, including the prospect of capturing Nvidia share related to Rubin in the second half of 2026, stronger contributions from DRAM and HBM memory testing, and newly secured business with Seagate and Toshiba in the hard disk drive market.
Other brokerage reactions and company developments have accompanied the recent guidance. Cantor Fitzgerald's note on the results also described a "significant beat and raise" in EPS projections and reiterated an Overweight stance while previously citing a $270 price target. Stifel separately moved its own price objective to $325 and maintained a Buy rating, pointing to the momentum in AI applications that now account for more than 70% of Teradyne's semiconductor test business according to that firm's read. By contrast, Northland downgraded Teradyne from Outperform to Market Perform, explicitly calling out valuation concerns despite the company's solid results.
Beyond analyst coverage, Teradyne disclosed a strategic partnership to bolster its data center testing capabilities. The company announced a joint venture with MultiLane to create MultiLane Test Products, or MLTP, aimed at developing test solutions for high-speed data connections used in AI data centers. The transaction is expected to close in the first half of 2026, with Teradyne holding a majority ownership stake and MultiLane retaining a minority position. Cantor and others view the JV as consistent with Teradyne's emphasis on expanding its footprint in AI and data center test infrastructure.
Teradyne's recent quarterly results and forward guidance were characterized by significant contributions from AI-related business segments, a development that underpins the optimism from several sell-side firms. At the same time, some analysts continue to signal caution over valuation metrics and the possibility of revenue volatility within the year. For investors seeking deeper modeling and valuation context, InvestingPro provides research and a Fair Value calculator that aggregates multiple industry valuation approaches to assess whether Teradyne represents a bargain at prevailing prices.
What this means for markets
- Semiconductor equipment and test markets are drawing investor attention as AI-related demand reshapes vendor revenue mixes.
- Memory and data center infrastructure suppliers, including DRAM/HBM and HDD testing segments, stand to affect equipment order books and supplier backlogs.
- Valuation dynamics in high-growth semiconductor suppliers remain a focal point for analysts and investors amid aggressive revenue and margin assumptions.