Teradyne (TER) Stock: After-Hours Surge Follows Q3 Beat and Strong AI Demand

TLDR

• Teradyne posted Q3 revenue of $769 million, beating the $743.85 million consensus estimate by about 3%
• The company reported adjusted EPS of $0.85, topping analyst expectations of $0.79 by $0.06
• Q4 guidance calls for revenue between $920 million and $1 billion, well above the $816.64 million consensus
• Teradyne stock jumped nearly 22% in after-hours trading, positioning for its best single-day performance ever
• CFO Sanjay Mehta will step down effective November 3, with Michelle Turner taking over the role

Teradyne shares rocketed 22% in Tuesday’s after-hours session following a third-quarter earnings report that beat expectations across the board. The semiconductor testing equipment maker also issued forward guidance that crushed analyst estimates.

Teradyne, Inc., TER

The company reported Q3 revenue of $769 million, up 4% year-over-year. This topped the consensus estimate of $743.85 million compiled by Fiscal.ai.

Adjusted earnings per share came in at $0.85. Analysts had expected $0.79.

The growth came primarily from System-on-a-Chip solutions for AI applications. Memory testing also performed well during the quarter.

For Q4, Teradyne forecast revenue between $920 million and $1 billion. That represents 25% year-over-year growth and a 27% sequential increase.

The company expects adjusted EPS of $1.20 to $1.46 for the fourth quarter. This excludes amortization of acquired intangible assets and the company’s investment in Technoprobe.

The guidance topped analyst expectations by a wide margin. The Street had been looking for Q4 revenue of $816.64 million and adjusted EPS of $1.02.

Strong AI Testing Demand Expected

Smith pointed to robust AI-related test demand across multiple segments. Compute, networking, and memory are all showing strength heading into the fourth quarter.

The North Reading, Massachusetts-based company has benefited from the surge in AI chip production. Testing equipment is critical for ensuring these complex processors meet quality standards.

Teradyne closed Tuesday’s regular session at $144.38, down 2.12%. The stock has gained 15% year-to-date.

Leadership Change

The company announced that CFO Sanjay Mehta will step down effective November 3. Mehta has held the position since 2019.

Michelle Turner will replace Mehta as CFO. Mehta will stay on as an executive advisor to help with capacity expansion driven by semiconductor testing demand.

He plans to retire in 2026. The transition comes as Teradyne navigates increased demand for its testing equipment.

The average analyst price target for Teradyne sits at $143.81 according to Koyfin. That implies a slight 0.40% downside from Tuesday’s closing price.

If the after-hours gains hold, Teradyne would record its best single trading day ever. The stock has gained 27.50% over the past 12 months and 38.61% over the last three months.

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