Teradyne (TER) Stock Forecast & Price Target

Teradyne's stock outlook appears favorable due to its robust demand projections in the semiconductor testing market, particularly with expectations of strong growth in system-on-chip (SoC) testing bolstered by increased AI applications, potentially leading to a market expansion from approximately $2 billion to over $2.7 billion by 2028. The company's management expressed confidence in maintaining an attractive margin profile while capitalizing on mid-teens growth rates in the automated test equipment (ATE) sector and over 20% growth in its robotics division through 2028, positioning Teradyne to outperform the broader semiconductor test market. Additionally, Teradyne anticipates that its strategic initiatives, particularly in targeting large hyperscaler and vertically-integrated producers, could enable it to double its earnings per share (EPS) from 2024 to 2028, further underpinning a strong long-term growth trajectory.

Teradyne’s outlook is negatively impacted by demand uncertainty in the semiconductor testing segment, exacerbated by tariffs and trade restrictions, leading management to lower its CY26 earnings expectations to the lower end of their prior targets. The company anticipates significant risks, including weakening global semiconductor demand, supply chain constraints, and potential mis-execution in its robotics growth strategy, which may impede its ability to meet market expectations. Additionally, the revised guidance for 2Q and CY25 indicates a reduction in expected revenues and highlights the challenges posed by customer reschedules and changing capital plans.