COHU

Teradyne has enhanced its Titan HP platform for AI chip testing, driving strong Q2 2026 results with Semi Test revenues up 128% and compute revenues up nearly 600%. The company faces competition from KLA and Cohu in the AI-driven semiconductor testing market. TER stock has surged 108% year-to-date but trades at a premium valuation with a forward P/S ratio of 10.77X versus the industry average of 7.25X.

Teradyne (TER) shares have surged 129.6% year-to-date, driven by strong AI infrastructure demand and record memory revenues of $212M in Q2. The company expects Q3 revenues of $1.20-$1.30B with 140% YoY earnings growth.

However, stretched valuation at 11.93X forward P/S, rising competition from Cohu and KLA, and margin pressure present risks. Zacks rates TER as a Hold, recommending investors wait for a better entry point.

Teradyne's memory revenues hit a record $212M in Q2 2026, marking its third consecutive quarter above $200M, driven by strong demand for HBM, DRAM, and NAND testing. The company launched Magnum E2, a next-generation memory test system supporting advanced interfaces like LPDDR6, DDR6, GDDR7, and NAND.

Management expects the 2026 memory test TAM to grow over 40% compared to 2025. However, TER stock trades at a premium valuation and faces competition from KLA and Cohu.

Cohu, a semiconductor testing and inspection equipment supplier, is positioned to benefit significantly from the AI data center boom. The company supplies critical quality control machines to major chip manufacturers and has an expanding $850 million sales pipeline in the AI segment. With projected 35% revenue growth to $612 million in 2026 and potential earnings doubling to $1.85 per share in 2027, analysts suggest the stock could deliver strong returns despite its current premium valuation.