Stifel adjusts target upward
Stifel raised its price target for Teradyne (NASDAQ:TER) to $325 from $280 and retained a Buy rating, citing stronger-than-expected momentum in AI-related semiconductor testing. The analyst move follows Teradyne management commentary that artificial intelligence use cases comprised in excess of 70% of the company’s semiconductor test revenue in the first quarter.
Revenue timing and conservatism on cadence
Stifel noted management’s expectation that 2026 revenue will skew toward the first half of the year. The firm interpreted the company’s projected 60/40 first-half/second-half split as conservative, reflecting caution about both quarterly variability tied to AI revenue and the potential for a broader pickup in other segments such as mobile NVIDIA GPU qualification.
Updated mid-term model
Teradyne revised its mid-term target model anchored to a semiconductor test total addressable market (TAM) assumption of $13 billion. Under that TAM assumption, the company is aiming for roughly $10.25 in earnings per share, plus or minus $0.75, on about $6 billion of revenue.
Stifel’s new $325 price target corresponds to 38 times the firm’s 2027 EPS estimate and represents a roughly 10% discount to peers, while acknowledging what Stifel described as a "re-invigorated growth outlook" for Teradyne.
Recent earnings and analyst activity
Teradyne reported a strong third-quarter performance, with revenue rising 18% versus the prior quarter. Stifel and others attribute that sequential strength mainly to growing demand for semiconductor tests driven by AI workloads in large-scale data center projects.
Following the quarterly results, Goldman Sachs upgraded Teradyne from Sell to Buy and set a price target of $230, pointing to expected growth in the semiconductor test market. Cantor Fitzgerald also raised its price target to $270 and kept an Overweight rating, noting the potential for Teradyne’s earnings per share to reach $5.50 versus a consensus estimate of $5.17.
Strategic moves and shareholder return
Teradyne announced a joint venture with MultiLane called MultiLane Test Products, intended to develop test solutions for AI data centers. That venture is expected to close in the first half of 2026, with Teradyne holding the majority ownership stake. The company also declared a quarterly dividend of $0.12 per share payable on March 13, 2026, to shareholders of record as of February 13, 2026.
Key takeaways
- Stifel increased its price target on Teradyne to $325 while maintaining a Buy rating, driven by heavy AI exposure in the company’s test business.
- Management sees 2026 revenue weighted to the first half; Stifel views the 60/40 split as conservative due to quarterly AI revenue variability and the prospect of broader segment recovery.
- Teradyne updated a mid-term model targeting approximately $10.25 EPS on $6 billion revenue, under a $13 billion semiconductor test TAM assumption.
Risks and uncertainties
- Quarterly variability in AI-driven revenue creates uncertainty around quarterly cadence and could affect near-term results.
- The mid-term targets rely on a $13 billion test TAM assumption; deviations in that TAM would alter the company’s EPS and revenue outlook.
- Planned strategic initiatives, including the MultiLane joint venture expected to close in the first half of 2026, carry execution and timing risk until completion.
Overall, the revision from Stifel and related analyst activity underscore heightened investor focus on AI-related semiconductor test demand and the company’s positioning to capture that market, while leaving intact the principal uncertainties tied to revenue timing, TAM assumptions, and execution of strategic collaborations.