Keysight Technologies: A Strategic Buy for AI and 6G Infrastructure Growth

In an era defined by the rapid acceleration of artificial intelligence (AI) and the looming revolution of 6G connectivity, investors are increasingly seeking exposure to companies that not only ride the wave of technological progress but actively enable it. Keysight Technologies (KEYS) stands out as a prime candidate for such a strategy. The company, a leader in electronic measurement and test solutions, has positioned itself at the intersection of two of the most transformative sectors of the decade: AI infrastructure and next-generation communications. With a recent $1.5 billion share buyback program, robust financial performance, and a strategic focus on high-growth R&D initiatives, Keysight offers a compelling case for investors seeking undervalued exposure to the infrastructure underpinning the AI and 6G boom.

A Track Record of Resilience and Outperformance

Keysight's financial performance in 2025 underscores its ability to capitalize on macroeconomic tailwinds. The company reported a 10% year-over-year revenue increase to $1.42 billion in Q4 2025, alongside a 16% rise in earnings per share to $1.91, outperforming analyst expectations. This resilience is driven by its diversified portfolio, which spans semiconductor testing, communications infrastructure, and industrial automation. Notably, the Communications Solutions Group (CSG) saw revenue grow 11% year-over-year to $990 million, fuelled by demand for AI infrastructure. These results highlight Keysight's ability to translate macro trends into consistent revenue growth, even in a volatile market environment.

Strategic Capital Allocation and Shareholder Returns

The recent announcement of a $1.5 billion share repurchase program-replacing its previous buyback initiative-signals Keysight's confidence in its financial health and long-term growth trajectory. This move follows a year of record free cash flow generation, with $1.3 billion returned to shareholders through buybacks and dividends in fiscal 2025. By prioritizing capital efficiency, Keysight is not only rewarding shareholders but also reinforcing its position as a disciplined operator in a capital-intensive industry. The buyback program, coupled with its strong balance sheet, suggests management views the stock as undervalued relative to its growth potential-a rare alignment of financial strength and strategic vision.

R&D-Driven Innovation in AI and 6G

Keysight's competitive edge lies in its role as a "tool provider" for the AI and 6G ecosystems. The company is doubling down on R&D investments to develop cutting-edge solutions for AI infrastructure and 6G pre-standard designs. For instance, Keysight has expanded collaborations with market-defining customers on 6G applications, doubling its partnerships over the past year. It has also secured a strategic partnership with Broadcom to advance next-generation 1.6-terabit networking silicon and custom AI accelerators, underscoring its technical leadership in enabling high-speed, low-latency connectivity.

The 6G market, projected to grow from $1.66 billion in 2024 to $14.94 billion by 2030 at a 44.17% CAGR, represents a massive opportunity for Keysight. Similarly, the AI infrastructure sector is set to benefit from a 9.4% CAGR in technology segment revenue through 2030, driven by hyperscale platforms like Amazon, Alphabet, and Microsoft. Keysight's expertise in semiconductor testing and network simulation positions it as an indispensable partner for companies building the hardware and software foundations of these technologies.

Undervaluation Amid High-Growth Sectors

Despite its strong fundamentals, Keysight remains undervalued relative to its peers and the explosive growth potential of its target markets. The company's price-to-earnings (P/E) ratio lags behind its historical average, even as it generates consistent free cash flow and reinvests aggressively in R&D. This discrepancy reflects broader market skepticism toward capital-intensive industrial firms, even as demand for their products surges. However, Keysight's diversified revenue streams, recurring nature of its services, and critical role in enabling AI and 6G infrastructure make it a risk-mitigated long-term play.

Conclusion: A Cornerstone for the Next Tech Cycle

Keysight Technologies is more than a beneficiary of the AI and 6G revolutions-it is a foundational enabler. Its recent financial outperformance, strategic buyback program, and R&D-driven innovation position it to capture significant value as these markets mature. For investors seeking exposure to the infrastructure underpinning the next wave of technological disruption, Keysight offers a compelling combination of undervaluation, growth potential, and operational discipline. As the 6G market balloons and AI infrastructure demand accelerates, Keysight's tools will be indispensable-and its stock price is poised to reflect that reality.