Teradyne TER is experiencing strong growth in its semiconductor test segment. 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.
This growth can be attributed to the rising demand for AI-related products. Customers are increasing their investments in cloud AI infrastructure and speeding up production of various AI accelerators, networking devices, memory, and power devices. Teradyne’s UltraFLEXplus system, designed for high-performance processors and networking devices, has proven to be a key catalyst in meeting the demanding requirements of AI devices, such as power, pin count, and test data.
This surge in demand was further supported by AI-driven advancements, particularly in AI accelerator Application-Specific Integrated Circuits, networking, and high-bandwidth memory (HBM) and Dynamic Random-Access Memory (DRAM), which significantly boosted the need for test equipment.
Memory test sales contributed significantly to growth of the Semiconductor Test segment. In the third quarter of 2025, memory test revenue more than doubled sequentially, reaching $128 million, with 75% of revenues driven by DRAM and 25% by flash memory for cloud SSD applications. The demand for DRAM was primarily fueled by final tests of DRAM and HBM performance tests, which are critical for AI applications.
For the fourth quarter of 2025, Teradyne expects revenues between $920 million and $1 billion, driven by strong AI-related demand in compute, networking, and memory segments.
Teradyne Suffers From Stiff Competition
Teradyne is facing stiff competition in the semiconductor test market from companies such as Advantest Corporation ATEYY and Cohu COHU.
Advantest is expanding its footprint in the semiconductor test market by focusing on the growing demand for AI-related high-performance semiconductors, such as high-performance computing devices and high-performance DRAM for data centers. In the second quarter of 2025, Advantest significantly increased sales of SoC and Memory Test Systems, driven by the growing complexity and enhanced performance of semiconductors.
Cohu’s expanding portfolio has been noteworthy. In September, Cohu announced that a major U.S. semiconductor manufacturer and foundry services company chose its Eclipse platform for production testing of next-generation processors.
The Eclipse systems feature Cohu’s T-Core Active Thermal Control, which offers precise thermal management up to 3kW dissipation with fast ramp rates. This improves yield and test repeatability. This scalable platform supports a variety of high-performance devices while lowering the total cost of ownership for IDMs, foundries, and OSATs.
TER’s Share Price Performance, Valuation, and Estimates
Teradyne shares have surged 137.5% in the trailing six-month period, outperforming the Zacks Computer & Technology sector’s rise of 26.3% and the Zacks Electronics - Miscellaneous Products increase of 24.7%.
TER Stock Performance
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TER stock is trading at a premium with a forward 12-month Price/Sales of 8.68X compared with the Electronics - Miscellaneous Products industry’s 6.99X. TER has a Value Score of D.
Price/Sales (F12M)
Image Source: Zacks Investment Research
The consensus mark for fiscal 2026 earnings is pegged at $3.51 per share, which has increased 1.44% over the past 30 days. This suggests 9.01% year-over-year growth.
Teradyne, Inc. Price and Consensus
Teradyne, Inc. price-consensus-chart | Teradyne, Inc. Quote
Teradyne currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
