Teradyne, Inc.

NASDAQ Global Select
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Bullish +75

JPMorgan upgrades Teradyne to Buy after 20% selloff, shares jump

📈 Teradyne shares jumped over 6% in premarket trading after JPMorgan upgraded its rating to Overweight following a ~20% post-earnings selloff.

💰 JPMorgan maintains a $400 price target for December 2026, implying roughly 31% upside from the stock's Wednesday close of $306.33.

🤖 The upgrade is based on four key drivers: demand for merchant GPU testing, proliferation of custom AI chips, rising memory test opportunities, and emerging silicon photonics business.

📊 Analyst Samik Chatterjee highlights a revenue opportunity from merchant GPU dual-sourcing reaching ~$1.2 billion by 2028, growing Teradyne's share to 30% over three years.

🧠 The memory segment is described as an underappreciated upside vector with forecasts of $1.1 billion in test revenue by 2028 driven by new fab deployments.

📈 Earnings estimates were raised, with adjusted EPS projected at $7.00 for 2026 and $9.80 for 2027, reflecting expected earnings growth of roughly 40% in both years.

⚠️ Execution risks remain regarding whether Teradyne can reach its $6 billion revenue target amidst uncertainty about merchant GPU market share against competitors.

🎯 Chatterjee believes reaching the $6B revenue target beyond 2027 with lower-than-expected GPU market share will be offset by upsides in other ATE TAM segments.

💸 JPMorgan justifies a valuation multiple of 35x to 40x, reflecting strong earnings outlook despite limited near-term visibility and lumpiness in customer purchasing.

🏭 Strategic themes include growing demand from hyperscalers, Neoclouds, and new fab buildouts as secular catalysts for the long term.

Bullish Signals
  • Shares in Teradyne jumped more than 6% in premarket trading following JPMorgan's upgrade to Overweight, identifying an attractive entry point after the recent pullback.
  • Analyst Samik Chatterjee maintains a price target of $400, implying approximately 31% upside from Wednesday's close of $306.33.
  • The upgrade is driven by growing demand for merchant GPU testing and new opportunities in silicon photonics and co-packaged optics testing businesses.
  • Teradyne expects revenue from merchant GPU dual-sourcing to grow significantly from around $50 million guided for 2026 to approximately $1.2 billion by 2028 as it builds market share from single digits toward 30%.
  • The memory segment is highlighted as an underappreciated upside vector with capacity-driven demand from greenfield fab deployments by Samsung, SK Hynix, and Micron.
  • JPMorgan forecasts memory test revenue to reach $1.1 billion by 2028, driven by HBM complexity and new fab buildouts.
  • The bank raised its 2026 adjusted EPS estimate to $7.00 from $6.65, lifted its 2027 estimate to $9.80 from $9.50, and projects earnings growth of roughly 40% in both 2027 and 2028.
  • JPMorgan justifies a valuation multiple of 35x to 40x due to the strong earnings outlook and anticipated upside beyond 2027 even if near-term market share fluctuates.
Risk Factors
  • Shares have already dropped nearly 20% following earnings, creating significant downside pressure even after analyst upgrades.
  • Execution risks persist due to the possibility that Teradyne may miss its $6 billion revenue target despite a broader industry market reaching $12 billion in 2027.
  • Uncertainty remains regarding Teradyne's ability to secure merchant GPU market share, which is crucial for meeting long-term growth projections.
  • JPMorgan warns of 'lumpiness' and limited near-term visibility in the business, suggesting potential volatility in revenue recognition.
  • The upgrade relies heavily on future market share gains from low-single digits toward 30% over three years, implying a significant challenge ahead.
  • Analysts acknowledge the business faces uncertainty around merchant GPU market dynamics which could dampen expected growth trajectories.
Full Analysis
Shares in Teradyne surged more than 6% in premarket trading on April 30, 2026, following an upgrade from JPMorgan to "Overweight" after the stock experienced a nearly 20% sell-off post-earnings. Analyst Samik Chatterjee of JPMorgan highlighted the current price as an attractive entry point, noting that temporary lumpiness in customer purchasing has not undermined the long-term drivers and secular catalysts for the company. The upgrade comes with a maintained December 2026 price target of $400, which implies approximately 31% upside from Wednesday's closing price of $306.33. Chatterjee identified four key growth drivers fueling this positive outlook: increasing demand for merchant GPU testing, the expansion of custom AI chips by hyperscalers and Neoclouds, a rising memory test opportunity linked to HBM complexity, and an emerging silicon photonics and co-packaged optics testing business. Specifically regarding merchant GPUs, Chatterjee anticipates revenue from dual-sourcing could reach roughly $1.2 billion by 2028, growing from about $50 million in 2026 as Teradyne increases its market share from low-single digits toward 30% over the next three years. He also described the memory segment as a highly underappreciated near-term upside vector, forecasting memory test revenue of $1.1 billion by 2028 due to capacity-driven demand from greenfield fab deployments by Samsung, SK Hynix, and Micron. JPMorgan has revised its financial forecasts upward, raising the adjusted EPS estimate for 2026 to $7.00 from $6.65 and increasing the 2027 projection to $9.80 from $9.50. The bank projects earnings growth of approximately 80% in 2026, followed by roughly 40% growth in both 2027 and 2028. Consequently, JPMorgan justifies a valuation multiple between 35x and 40x based on the strong earnings outlook, despite acknowledging business visibility challenges. While execution risks persist—particularly regarding Teradyne potentially falling short of its $6 billion revenue target if merchant GPU market share remains below 25%—Chatterjee believes that reaching the revenue goal in a relatively short timeframe beyond 2027 is supported by upsides in other areas of the Automated Test Equipment (ATE) Total Addressable Market (TAM).