Teradyne Stock Spikes 20% on Earnings. How AI Is Lifting Shares.

The company forecast a blockbuster fourth quarter driven by artificial intelligence demand. (dreamstime)

Key Points

• Teradyne’s third-quarter adjusted earnings were 85 cents per share, exceeding the 79 cents per share Wall Street estimate.
• Third-quarter revenue reached $769 million, surpassing analysts’ consensus estimate of $744 million.
• The company’s fourth-quarter revenue guidance of $920 million to $1 billion significantly exceeded the $816 million forecast.

Shares of Teradyne rose sharply Wednesday after the maker of test systems for semiconductors and robotics beat quarterly earnings expectations and issued a blockbuster outlook.

The company posted adjusted earnings of 85 cents a share for the third quarter, ahead of Wall Street’s call for 79 cents. Revenue totaled $769 million, up from $737 million a year ago and above analysts’ consensus estimate of $744 million.

More importantly, Teradyne’s fourth-quarter guidance blew past investors’ expectations. The company anticipates revenue between $920 million and $1 billion for the current quarter, much higher than the $816 million analysts had forecast.

Shares rose 20% to $173.28 Wednesday, putting the S&P 500 member on track for an all-time closing high, according to Dow Jones Market Data.

Investors can thank artificial intelligence. The third-quarter growth came primarily from system-on-a-chip solutions for AI applications and strong results in memory.

“As we look ahead to Q4, AI-related test demand remains robust across compute, networking and memory segments,” CEO Greg Smith said in a statement.

Write to Nate Wolf at nate.wolf@barrons.com