Bank of America Securities Maintains Sell Rating on Teradyne Amid Speculative Opportunities and Premium Valuation

Teradyne's stock performance is influenced by potential new business opportunities, such as NVIDIA GPU testing and Apple's 2nm product ramp. However, these opportunities are speculative and their realization is uncertain. The current valuation is at a premium, trading at 26 times estimated earnings for 2026, which is higher than peers. Analyst Vivek Arya from Bank of America Securities reiterated a Sell rating with a $110 price target.

Teradyne Inc. (TER) reported robust earnings for the second quarter of 2025, with revenue exceeding expectations and a stock price surge following the announcement. The company's strong performance was driven by growth in AI compute applications, which are expected to be a significant revenue driver in the second half of 2025 [2].

Teradyne's stock price jumped by 20.02% in regular trading, closing at $108.68. The company's CEO, Greg Smith, emphasized the transformative impact of AI on Teradyne's business and expressed growing confidence in the company's future prospects [2]. However, the current valuation of Teradyne's stock is at a premium, trading at 26 times estimated earnings for 2026, which is higher than peers.

Analyst Vivek Arya from Bank of America Securities reiterated a Sell rating with a $110 price target, citing the uncertainty of potential new business opportunities such as NVIDIA GPU testing and Apple's 2nm product ramp [1]. These opportunities are speculative and their realization is uncertain, which may impact Teradyne's stock performance.

References:
[1] https://www.ainvest.com/news/apple-record-breaking-revenue-surge-iphone-16-china-propel-growth-2508/
[2] https://www.investing.com/news/transcripts/earnings-call-transcript-teradyne-beats-q2-2025-forecasts-stock-surges-93CH-4160628