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For the first quarter of 2026, Teradyne expects revenues between $1,150 million and $1,250 million. Non-GAAP earnings are expected to be between $1.89 and $2.25 per share.
The Zacks Consensus Estimate for earnings is currently pegged at $2.08 per share, unchanged over the past 30 days. This indicates a 177.33% increase from the figure reported in the year-ago quarter. The consensus mark for revenues is pegged at $1.20 billion, suggesting an increase of 75.28% from the year-ago quarter’s reported numbers.
Teradyne’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 17.46%.
Let’s see how things have shaped up for the upcoming announcement.
Factors to Note Ahead of TER’s Q1 Results
Teradyne’s first-quarter performance is expected to have benefited from strong AI-related demand for computer, networking and memory segments. Strong demand for custom ASICs from hyperscalers is expected to have driven growth in the to-be-reported quarter.
The company expects robust growth in the semiconductor test market, particularly in the compute segment, which is projected to expand significantly due to the rapid build-out of AI data centers and growth of edge AI. The company anticipates that the compute segment will drive a substantial portion of its revenue in 2026, with AI applications accounting for up to 70% of its revenue in the first quarter of 2026.
The UltraFLEXplus system, designed for high-performance processors and networking devices, is expected to see increased demand in the to-be-reported quarter due to its architectural advantages in handling complex AI devices.
Margin expansion and operating leverage are also expected to have benefited Teradyne in the first quarter of 2026. Gross margins are projected to be in the range of 58.5% to 59.5%, up 180 basis points at the midpoint compared with the fourth quarter of 2025. The non-GAAP operating profit rate at the midpoint of guidance is 32%, reflecting the company’s ability to scale efficiently and capitalize on its strong revenue growth.
TER shares have also outperformed their peers, which include Advantest Corporation (ATEYY - Free Report) , Vertiv (VRT - Free Report) and KLA Corporation (KLAC - Free Report) . All three companies are expanding their footprint in the AI infrastructure space. Advantest, Vertiv, and KLA shares have gained 40.9%, 88.3%, and 49.1% in the year-to-date period, respectively.
TER Stock's Performance
Image Source: Zacks Investment Research
Teradyne’s stock is not so cheap, as the Value Score of F suggests a stretched valuation at this moment.
In terms of the forward 12-month Price/Sales, Teradyne is trading at 13.66X, higher than the industry’s 10.47X.
TER's Valuation
Image Source: Zacks Investment Research
TER Benefits From Robust Semiconductor Test Segment
Teradyne’s growing demand for AI infrastructure is driving robust growth across its semiconductor test and robotics divisions and helping the company to fend off its competitors like Advantest, Vertiv and KLA.
In the fourth quarter of 2025, Semiconductor Test revenues were $883 million, accounting for approximately 81.5% of total sales. This reflects 45% year-over-year growth and a 46% sequential increase compared with the third quarter of 2025. This growth was fueled by increasing demand for AI-driven compute and memory applications, which have become a significant portion of Teradyne's business.
Teradyne’s acquisitions have played a crucial role in its success. Teradyne recently acquired TestInsight to improve its abilities in semiconductor test development and validation, particularly for complex AI devices. Combining TestInsight’s tools with Teradyne’s automated test equipment (ATE) platforms will simplify design-to-test workflows, cut down debug cycles and speed up time-to-market. This move also strengthens Teradyne’s commitment to an open ecosystem. TestInsight will keep supporting various ATE platforms and maintaining existing partner relationships.
Teradyne anticipates robust growth in the automated test equipment total addressable market, which is expected to expand from $9 billion in 2025 to $12 billion to $14 billion in the mid-term. This growth is largely attributed to the increasing complexity of AI-driven applications, the transition to edge AI and the proliferation of AI data centers.
What Should Investors Do With TER Stock?
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. These factors have justified its premium valuation.
View the Zacks #1 Rank List
Image: Zacks
Should You Buy, Sell, or Hold TER Stock Before Q1 Earnings Release?
Key Takeaways
Teradyne (TER - Free Report) is set to report its first-quarter 2026 results on April 28, 2026.
For the first quarter of 2026, Teradyne expects revenues between $1,150 million and $1,250 million. Non-GAAP earnings are expected to be between $1.89 and $2.25 per share.
The Zacks Consensus Estimate for earnings is currently pegged at $2.08 per share, unchanged over the past 30 days. This indicates a 177.33% increase from the figure reported in the year-ago quarter. The consensus mark for revenues is pegged at $1.20 billion, suggesting an increase of 75.28% from the year-ago quarter’s reported numbers.
Teradyne, Inc. Price and EPS Surprise
Teradyne, Inc. price-eps-surprise | Teradyne, Inc. Quote
Teradyne’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 17.46%.
Let’s see how things have shaped up for the upcoming announcement.
Factors to Note Ahead of TER’s Q1 Results
Teradyne’s first-quarter performance is expected to have benefited from strong AI-related demand for computer, networking and memory segments. Strong demand for custom ASICs from hyperscalers is expected to have driven growth in the to-be-reported quarter.
The company expects robust growth in the semiconductor test market, particularly in the compute segment, which is projected to expand significantly due to the rapid build-out of AI data centers and growth of edge AI. The company anticipates that the compute segment will drive a substantial portion of its revenue in 2026, with AI applications accounting for up to 70% of its revenue in the first quarter of 2026.
The UltraFLEXplus system, designed for high-performance processors and networking devices, is expected to see increased demand in the to-be-reported quarter due to its architectural advantages in handling complex AI devices.
Margin expansion and operating leverage are also expected to have benefited Teradyne in the first quarter of 2026. Gross margins are projected to be in the range of 58.5% to 59.5%, up 180 basis points at the midpoint compared with the fourth quarter of 2025. The non-GAAP operating profit rate at the midpoint of guidance is 32%, reflecting the company’s ability to scale efficiently and capitalize on its strong revenue growth.
TER Shares Outperform Sector
Teradyne shares have surged 99% in the year-to-date period, outperforming the Zacks Computer & Technology sector’s growth of 5.4% and the Zacks Electronics - Miscellaneous Products increase of 42.2%.
TER shares have also outperformed their peers, which include Advantest Corporation (ATEYY - Free Report) , Vertiv (VRT - Free Report) and KLA Corporation (KLAC - Free Report) . All three companies are expanding their footprint in the AI infrastructure space. Advantest, Vertiv, and KLA shares have gained 40.9%, 88.3%, and 49.1% in the year-to-date period, respectively.
TER Stock's Performance
Image Source: Zacks Investment Research
Teradyne’s stock is not so cheap, as the Value Score of F suggests a stretched valuation at this moment.
In terms of the forward 12-month Price/Sales, Teradyne is trading at 13.66X, higher than the industry’s 10.47X.
TER's Valuation
Image Source: Zacks Investment Research
TER Benefits From Robust Semiconductor Test Segment
Teradyne’s growing demand for AI infrastructure is driving robust growth across its semiconductor test and robotics divisions and helping the company to fend off its competitors like Advantest, Vertiv and KLA.
In the fourth quarter of 2025, Semiconductor Test revenues were $883 million, accounting for approximately 81.5% of total sales. This reflects 45% year-over-year growth and a 46% sequential increase compared with the third quarter of 2025. This growth was fueled by increasing demand for AI-driven compute and memory applications, which have become a significant portion of Teradyne's business.
Teradyne’s acquisitions have played a crucial role in its success. Teradyne recently acquired TestInsight to improve its abilities in semiconductor test development and validation, particularly for complex AI devices. Combining TestInsight’s tools with Teradyne’s automated test equipment (ATE) platforms will simplify design-to-test workflows, cut down debug cycles and speed up time-to-market. This move also strengthens Teradyne’s commitment to an open ecosystem. TestInsight will keep supporting various ATE platforms and maintaining existing partner relationships.
Teradyne anticipates robust growth in the automated test equipment total addressable market, which is expected to expand from $9 billion in 2025 to $12 billion to $14 billion in the mid-term. This growth is largely attributed to the increasing complexity of AI-driven applications, the transition to edge AI and the proliferation of AI data centers.
What Should Investors Do With TER Stock?
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. These factors have justified its premium valuation.
TER stock currently carries a Zacks Rank #2 (Buy), which implies that investors should start accumulating the stock right now. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.