Teradyne's AI testing opportunity prompts Jefferies 'buy' rating Proactive Wed, November 11, 2026 at 1:05 PM EST 2 min read JEF -0.35% TER +10.49% NVDA +4.70% Explore stocks on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
Jefferies has initiated coverage of Teradyne Inc (NYSE:TER), the semiconductor test equipment maker, with a Buy rating and a $284 price target, citing growing demand for artificial intelligence computing.
The broker sees the semiconductor testing market expanding from approximately $9 billion in 2025 to $25 billion by 2030, creating significant growth opportunities for Teradyne.
Shares have fallen approximately 53% from their summer highs amid a broader sector sell-off, which Jefferies considers an attractive entry point.
The bank expects Teradyne to benefit as major chipmakers and cloud computing providers adopt dual sourcing, using multiple suppliers rather than relying on one equipment manufacturer.
This could increase Teradyne's share of the system-on-chip (SoC) testing market from approximately 27% in 2025 to 34% by 2030.
Jefferies forecasts SoC revenue rising from approximately $1.9 billion to $6.9 billion over the same period.
Nvidia Corp (NASDAQ:NVDA, XETRA:NVD), the artificial intelligence chipmaker, represents a particularly significant opportunity, with Teradyne potentially securing 30% of its testing equipment spending by around the end of 2029.
That could create a revenue stream exceeding $2 billion, compared with an estimated $50 million in 2026.
The broker forecasts Teradyne generating revenue of $6.7 billion in 2027 and $8.5 billion in 2028, respectively 2% and 5% above market expectations.
Semiconductor testing revenue could reach approximately $7.2 billion in 2028, around 5% above consensus, as demand from Nvidia and hyperscalers accelerates.
Jefferies also identifies high-bandwidth memory (HBM) testing and early exposure to co-packaged optics (CPO) testing as additional growth opportunities.
The bank expects operating margins to expand from 33% in 2026 to 38% in 2028, with operating expenses growing at less than half the pace of revenue.
It acknowledges that equipment orders will remain uneven because supply constraints can delay testing equipment purchases, although it expects deferred demand to materialise rather than disappear.
Jefferies also argues that Teradyne's growth does not depend on customers replacing existing equipment, but on winning second-source contracts for new production capacity and chip launches.
Its $284 valuation combines price-to-earnings and enterprise-value-to-earnings-before-interest, tax, depreciation and amortisation multiples based on 2028 forecasts.
The broker applies approximately 15 times earnings and 12 times enterprise value to earnings before interest, tax, depreciation and amortisation, below Teradyne's five-year historical medians of 24 times and 17 times respectively.
