Teradyne (TER) Stock Forecast & Price Target

The outlook for Teradyne appears positive, driven by anticipated strong demand for System on Chip (SoC) testing, particularly as it relates to AI technologies, which is expected to boost the semiconductor testing market significantly. Management's confidence in the performance of their SoC and memory test platforms, alongside a strategic focus on large hyperscalers and diversified vertically-integrated producers, positions Teradyne well for growth in the high-growth compute testing segment projected to expand from approximately $2 billion to over $2.7 billion by 2028. Furthermore, Teradyne anticipates the potential to double its earnings per share (EPS) from 2024 to 2028, supported by growth in robotics and improvements in semiconductor test utilization.

Teradyne's outlook is negatively impacted by significant demand uncertainty in the semiconductor testing market, exacerbated by trade restrictions and tariffs, which has led management to revise its earnings outlook for CY26 to the lower end of its prior target model. Additionally, the company has pointed to customer reschedules and capital plan reviews as contributing factors to the reduced outlook for both 2Q and CY25, indicating a potential downturn influenced by factors like weakening global semiconductor demand and supply chain constraints. Further complicating Teradyne's situation are risks associated with declining market share among key customers, slower growth in industrial automation, and challenges in executing their robotics growth strategy, all of which could impede future revenue generation.