Keysight Technologies: A Pivotal Play in the 5G and IoT Revolution

The global transition to 5G infrastructure and the proliferation of IoT devices are creating a seismic shift in the technology landscape—one that is fueling unprecedented demand for advanced testing solutions. Among the companies poised to capitalize on this trend is Keysight Technologies (KEYS), a leader in electronic measurement and software tools. While its market position is often overlooked, Keysight's strategic moves, financial resilience, and technological dominance position it as a rare long-term growth opportunity in an era of fragmented tech investments.

Market Leadership in a Booming Industry

Keysight's Communications Solutions Group (CSG), which generates 67% of its revenue, is the engine driving its success. This segment grew 9% year-over-year in Q2 2025, fueled by demand for 5G Advanced, aerospace/defense systems, and Non-Terrestrial Networks (NTN). The CSG's 26% operating margin underscores its profitability, while software and services—now 36% of total revenue—provide a stable, recurring income stream.

The 5G Device Testing Market, which Keysight dominates with its flagship UXM 5G Wireless Test Platform, is projected to grow from $1.4 billion in 2023 to $2.59 billion by 2032 (). Keysight's inclusion among the top players—alongside Anritsu and Rohde & Schwarz—reflects its technological edge. Its recent acquisition of Spirent Communications, a leader in network security and 6G testing, further cements its position as a one-stop-shop for next-generation infrastructure validation.

Growth Drivers: Beyond the Obvious

1. Wireless Innovation Surge:
   Keysight's tools are critical for testing 5G millimeter-wave deployments and 6G research, areas where telecom giants like Verizon and AT&T are investing billions. Its 50+ GHz probes and AI-driven testing software enable faster validation of high-speed networking standards (e.g., PCIe 6.0 and 802.3ck), directly aligning with data center upgrades and cloud infrastructure demands.

2. AI and Sustainability Synergy:
   The company is integrating AI into its testing workflows, automating complex tasks like radio propagation modeling and cybersecurity analysis. This not only reduces costs but also opens new revenue streams in AI-driven system design. Additionally, Keysight's $2.4 billion order backlog and record $457 million free cash flow in Q2 2025 highlight strong demand for its solutions.

3. Strategic Partnerships:
   Collaborations like its work with the 5G Automotive Association (demonstrating first-of-its-kind 5G-V2X Direct technology) and its joint project with ElastiFlow (enhancing network visibility) showcase Keysight's ability to shape industry standards. These partnerships also insulate it from sector-specific risks, such as softness in automotive or energy markets.

Underappreciated Catalysts for Share Expansion

• Supply Chain Agility: Keysight has shifted manufacturing to Southeast Asia, reducing China-linked tariff exposure to <10%. This strategic move shields it from geopolitical volatility while maintaining cost competitiveness.
• 6G and NTN Leadership: Its Non-Terrestrial Network (NTN) testing tools are vital for satellite-based 5G and 6G deployments, a niche area where few rivals can compete.
• Sustainability as a Competitive Advantage: A virtual power purchase agreement (VPPA) and STEM education initiatives appeal to ESG-conscious investors, attracting capital in an era where environmental and social governance (ESG) standards are paramount.

Financial Fortitude and Valuation

Keysight's $1.31 billion in Q2 revenue—up 7.4% year-over-year—and $257 million net income underscore its financial health. With a $3.1 billion cash reserve and a 5-7% long-term revenue growth target, the company is poised to capitalize on secular trends. Its P/E ratio of 22.5 remains reasonable compared to peers, and a $145 price target (implying 30% upside) reflects investor confidence in its trajectory.

Risks, but Manageable Ones

• Geopolitical Tensions: U.S.-China trade dynamics pose risks, but Keysight's supply chain diversification limits exposure.
• Tariff Volatility: Pricing adjustments and strategic partnerships have mitigated these challenges thus far.

Conclusion: A Buy on Long-Term Vision

Keysight is not just a beneficiary of 5G and IoT growth—it is an architect of these technologies. With a $2.59 billion market growing at 7.1% annually, a $2.4 billion order backlog, and a $750 million synergy boost from Spirent, the company is primed for sustained outperformance. Its underappreciated market share expansion, fueled by AI integration, supply chain agility, and leadership in 6G/NTN, makes it a rare “buy and hold” opportunity in a fragmented tech sector.

Investors who act now will secure a stake in a company that is literally testing the future of connectivity—and reaping the rewards long before the market fully recognizes its potential.

Act before the crowd catches on.