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Teradyne vs. KLAC: Which AI Infrastructure Stock Is the Better Buy?
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Key Takeaways
Teradyne is seeing AI-driven growth as demand rises for testing high-performance chips used in AI systems.
KLAC benefits from strong AI investment through its leadership in process control and advanced packaging.
KLAC's faster-growing packaging business and earnings momentum give it an edge over Teradyne.
Teradyne (TER - Free Report) and KLA Corporation (KLAC - Free Report) are major players in the AI Infrastructure market. While Teradyne focuses on automated test equipment essential for validating high-performance AI chips, KLA provides advanced process control and inspection solutions that enable manufacturers to produce increasingly complex semiconductors used in AI data centers and applications.
According to International Data Corporation (IDC), spending on AI infrastructure is expected to surpass $758 billion by 2029, with 94.3% of the spending allocated to servers equipped with embedded accelerators. IDC expects momentum in AI investment to continue in 2026, driven by strong spending from hyperscalers and cloud service providers. According to Gartner, global AI spending is expected to exceed $2 trillion in 2026 compared with an estimated $1.5 trillion in 2025. Both Teradyne and KLA are expected to benefit from this rapid growth pace.
So, TER or KLAC — Which of these AI Infrastructure stocks has the greater upside potential? Let’s find out.
The Case for TER Stock
Teradyne is benefiting from the growing demand for AI infrastructure, which has been a major growth driver of its success. It is benefiting from strong AI-related demand that is driving significant investments in cloud AI build-out as customers accelerate the production of a wide range of AI accelerators, networking, memory and power devices.
The company’s UltraFLEXplus system is specifically designed for high-performance processors and networking devices, which are critical for AI applications. This has proven to be a key driver in boosting the Semiconductor Test business. In the third quarter of 2025, Semiconductor Test revenues rose 7% year over year and 23% sequentially, accounting for 78.8% of sales in the reported quarter.
Teradyne is integrating AI features into its robotics products, such as UR cobots and AMRs, to enhance performance in AI-driven work cell applications. In the third quarter of 2025, 8% of robotics sales were for AI-related products, up from 6% in the previous quarter.
TER anticipates AI-related demand to remain the primary engine of growth in the fourth quarter of 2025 and beyond. For the fourth quarter of 2025, Teradyne expects revenues between $920 million and $1 billion.
The Case for KLAC Stock
KLA is benefiting from the growing demand for AI infrastructure through its leadership in process control and its ability to address growth markets in wafer fab equipment (WFE), including high-bandwidth memory (HBM) and advanced packaging.
The company has seen significant growth in its advanced packaging portfolio, which is essential for heterogeneous device integration in AI applications. KLAC’s advanced packaging systems revenue is expected to exceed $925 million in calendar year 2025, marking a 70% year-over-year increase.
Strong investments in WFE and advanced packaging represent a strong growth opportunity for the company. Growth of advanced packaging supporting heterogeneous chip integration has become a new market for KLAC, currently worth $11 billion and growing faster than the core WFE.
Looking ahead to 2026, KLAC expects continued growth in AI-related investments, with a broader spending profile across WFE and advanced packaging. The company anticipates accelerating growth in the second half of 2026, driven by increased investments in leading-edge logic, HBM, and advanced packaging. For fiscal second-quarter 2026, revenues are expected to be $3.225 billion, plus/minus $150 million.
Price Performance and Valuation of TER and KLAC
In the trailing 12-month period, shares of Teradyne and KLAC have appreciated 72.5% and 104.4%, respectively. The outperformance of KLAC stock can be attributed to its dominant process control market share, strong AI infrastructure investment and strong momentum in advanced packaging.
Despite Teradyne’s expanding AI portfolio, the company is suffering from weak demand in the mobile and auto industrial segments, which is impacting overall business performance. Continued investments in factory expansion across multiple geographies to meet AI-related demand may lead to further pressure on gross margins in the near term. Stiff competition also remains a concern.
TER and KLAC Stock Performance
Image Source: Zacks Investment Research
Valuation-wise, Teradyne and KLA shares are currently overvalued, as suggested by a Value Score of D and F, respectively.
In terms of forward 12-month Price/Sales, TER shares are trading at 9.52X, lower than KLA’s 14.63X.
TER and KLAC Valuation
Image Source: Zacks Investment Research
How Do Earnings Estimates Compare for TER & KLAC?
The Zacks Consensus Estimate for TER’s 2025 earnings is pegged at $3.54 per share, unchanged over the past 30 days. This indicates a 9.94% increase year over year.
The Zacks’ Consensus Estimate for KLAC’s fiscal 2026 earnings is pegged at $35.61 per share, which has increased 0.53% over the past 30 days. This indicates a 7% increase year over year.
While both Teradyne and KLA stand to benefit from the booming AI Infrastructure market, KLAC offers a greater upside potential due to its strong leadership in process control, faster-growing advanced packaging business and stronger earnings momentum.
Teradyne’s robust and diversified portfolio to meet the rising demand for AI-driven technologies is contributing to its growth prospects continuously, driving top-line growth. However, sluggishness in mobile, auto, and industrial end-markets, margin pressure, and intensifying competition remain a headwind.
Image: Bigstock
Teradyne vs. KLAC: Which AI Infrastructure Stock Is the Better Buy?
Key Takeaways
Teradyne (TER - Free Report) and KLA Corporation (KLAC - Free Report) are major players in the AI Infrastructure market. While Teradyne focuses on automated test equipment essential for validating high-performance AI chips, KLA provides advanced process control and inspection solutions that enable manufacturers to produce increasingly complex semiconductors used in AI data centers and applications.
According to International Data Corporation (IDC), spending on AI infrastructure is expected to surpass $758 billion by 2029, with 94.3% of the spending allocated to servers equipped with embedded accelerators. IDC expects momentum in AI investment to continue in 2026, driven by strong spending from hyperscalers and cloud service providers. According to Gartner, global AI spending is expected to exceed $2 trillion in 2026 compared with an estimated $1.5 trillion in 2025. Both Teradyne and KLA are expected to benefit from this rapid growth pace.
So, TER or KLAC — Which of these AI Infrastructure stocks has the greater upside potential? Let’s find out.
The Case for TER Stock
Teradyne is benefiting from the growing demand for AI infrastructure, which has been a major growth driver of its success. It is benefiting from strong AI-related demand that is driving significant investments in cloud AI build-out as customers accelerate the production of a wide range of AI accelerators, networking, memory and power devices.
The company’s UltraFLEXplus system is specifically designed for high-performance processors and networking devices, which are critical for AI applications. This has proven to be a key driver in boosting the Semiconductor Test business. In the third quarter of 2025, Semiconductor Test revenues rose 7% year over year and 23% sequentially, accounting for 78.8% of sales in the reported quarter.
Teradyne is integrating AI features into its robotics products, such as UR cobots and AMRs, to enhance performance in AI-driven work cell applications. In the third quarter of 2025, 8% of robotics sales were for AI-related products, up from 6% in the previous quarter.
TER anticipates AI-related demand to remain the primary engine of growth in the fourth quarter of 2025 and beyond. For the fourth quarter of 2025, Teradyne expects revenues between $920 million and $1 billion.
The Case for KLAC Stock
KLA is benefiting from the growing demand for AI infrastructure through its leadership in process control and its ability to address growth markets in wafer fab equipment (WFE), including high-bandwidth memory (HBM) and advanced packaging.
The company has seen significant growth in its advanced packaging portfolio, which is essential for heterogeneous device integration in AI applications. KLAC’s advanced packaging systems revenue is expected to exceed $925 million in calendar year 2025, marking a 70% year-over-year increase.
Strong investments in WFE and advanced packaging represent a strong growth opportunity for the company. Growth of advanced packaging supporting heterogeneous chip integration has become a new market for KLAC, currently worth $11 billion and growing faster than the core WFE.
Looking ahead to 2026, KLAC expects continued growth in AI-related investments, with a broader spending profile across WFE and advanced packaging. The company anticipates accelerating growth in the second half of 2026, driven by increased investments in leading-edge logic, HBM, and advanced packaging. For fiscal second-quarter 2026, revenues are expected to be $3.225 billion, plus/minus $150 million.
Price Performance and Valuation of TER and KLAC
In the trailing 12-month period, shares of Teradyne and KLAC have appreciated 72.5% and 104.4%, respectively. The outperformance of KLAC stock can be attributed to its dominant process control market share, strong AI infrastructure investment and strong momentum in advanced packaging.
Despite Teradyne’s expanding AI portfolio, the company is suffering from weak demand in the mobile and auto industrial segments, which is impacting overall business performance. Continued investments in factory expansion across multiple geographies to meet AI-related demand may lead to further pressure on gross margins in the near term. Stiff competition also remains a concern.
TER and KLAC Stock Performance
Image Source: Zacks Investment Research
Valuation-wise, Teradyne and KLA shares are currently overvalued, as suggested by a Value Score of D and F, respectively.
In terms of forward 12-month Price/Sales, TER shares are trading at 9.52X, lower than KLA’s 14.63X.
TER and KLAC Valuation
Image Source: Zacks Investment Research
How Do Earnings Estimates Compare for TER & KLAC?
The Zacks Consensus Estimate for TER’s 2025 earnings is pegged at $3.54 per share, unchanged over the past 30 days. This indicates a 9.94% increase year over year.
Teradyne, Inc. Price and Consensus
Teradyne, Inc. price-consensus-chart | Teradyne, Inc. Quote
The Zacks’ Consensus Estimate for KLAC’s fiscal 2026 earnings is pegged at $35.61 per share, which has increased 0.53% over the past 30 days. This indicates a 7% increase year over year.
KLA Corporation Price and Consensus
KLA Corporation price-consensus-chart | KLA Corporation Quote
Conclusion
While both Teradyne and KLA stand to benefit from the booming AI Infrastructure market, KLAC offers a greater upside potential due to its strong leadership in process control, faster-growing advanced packaging business and stronger earnings momentum.
Teradyne’s robust and diversified portfolio to meet the rising demand for AI-driven technologies is contributing to its growth prospects continuously, driving top-line growth. However, sluggishness in mobile, auto, and industrial end-markets, margin pressure, and intensifying competition remain a headwind.
Currently, KLA sports a Zacks Rank #1 (Strong Buy), making the stock a stronger pick than Teradyne, which has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.