Why Teradyne Stock Is Skyrocketing This Week
Key Points
Teradyne beat expectations at the top of the income statement as well as the bottom.
The company sees strong year-over-year revenue growth in Q4 2025.
Several analysts boosted their price targets on Teradyne stock.
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Teradyne (NASDAQ: TER) reported strong third-quarter 2025 financial results this week, surpassing analysts' top- and bottom-line estimates. However, that's not the only thing contributing to investors' excitement. Management also provided encouraging guidance for the fourth quarter, motivating bulls to click the buy button on the semiconductor stock. And if that wasn't enough, analysts' upwardly revised price targets provided even more fodder for the bulls.
According to data provided by S&P Global Market Intelligence, Teradyne stock has climbed 22.6% from the end of trading last Friday through the close of Thursday's market session.
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AI demand soared, and Teradyne reaped the benefits
With third-quarter 2025 revenue of $769 million and adjusted earnings per share (EPS) of $0.85, Teradyne blew past analysts' expectations that it'd report sales of $744 million and adjusted EPS of $0.79, respectively.
Management attributed much of the strong performance to growth in artificial intelligence (AI) demand. Greg Smith, Teradyne's CEO, commented: "The huge investments in Cloud AI build out drove our Q3 performance to the high end of our guidance range as our customers ramped production of a wide range of AI accelerator, networking, memory and power devices."
Teradyne foresees a strong end to 2025 as well, projecting fourth-quarter 2025 revenue of $920 million to $1 billion. For context, it reported revenue of $753 million in Q4 2024.
After the company's strong performance and management's confidence that the company will continue to thrive due to strong AI demand, several analysts boosted price targets on Teradyne stock:
- UBS hiked the price target to $200 from $165.
- Susquehanna lifted the price target to $215 from $200.
- JPMorgan increased the price target to $190 from $122.
Is it too late to buy Teradyne stock after the recent rise?
Despite the stock's climb this week, Teradyne has the wind at its back, and there's still room for the stock to run. In offering testing solutions for semiconductors, Teradyne provides a unique opportunity for investors seeking AI exposure.
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Scott Levine has no position in any of the stocks mentioned. The Motley Fool recommends Teradyne. The Motley Fool has a disclosure policy.
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