AI Index / Teradyne, Inc.
Teradyne, Inc. (TER)
Main revenue sources: (1) Semiconductor Test (~80%): SoC (VIP compute, networking) and Memory (HBM/DRAM). AI is a direct, dominant driver (>60% of Q4 revenue; ~70% expected in Q1’26). (2) Product Test Group: defense/aerospace, Production Board Test, LitePoint, Quantifi Photonics. AI contributes indirectly via cloud/data center buildouts (server trays, silicon photonics, high‑speed I/O). (3) Robotics: cobots/AMRs with physical AI; early but growing (e-commerce/logistics). Given AI’s centrality to compute and memory test and rising spillover into product test and robotics, AI contribution is very high.
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A striking trend was the increase in AI-driven revenue in the second half of 2025. This is obvious in compute and memory, however, the rapid build-out of cloud and edge AI is also driving demand for power management, SLT, HDD, ICT and optical test.
- Gregory Smith
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Quotes from teradyne Executives About Artificial Intelligence and Generative AI
When you roll it up, AI demand drove 40% to 50% of our revenue in Q3. In Q4, AI drove more than 60% of our revenue. Looking forward to Q1 of 2026, we expect that upwards of 70% of our revenue will be driven by AI applications.
- Gregory Smith
Our full year financial results reflect a successful pivot to AI-driven demand in high performance computing.
- Gregory Smith
Right now, the prime mover of the market is AI data center. Our product lines cover this market from beginning to end from testing compute devices to complete server trays all the way to robot-assisted operations in AI data centers.
- Gregory Smith
Looking beyond the AI data center, segments of the market where Teradyne has high share are poised for recovery. auto/industrial will have long-term growth tied to the transition to Edge AI, EVs and 800-volt data center power.
- Gregory Smith
In Robotics, we have built a world-class platform for physical AI applications that is being applied in multiple industry verticals, and we have embedded AI capabilities into our AMR products.
- Gregory Smith
This new target earnings model is reflective of our conviction in the growth potential of the ATE TAM driven by all things AI even at today's unprecedented levels.
- Michelle Turner
So at an ATE TAM of $12 billion to $14 billion, our target model assumes roughly $6 billion of revenue... driven by all things AI.
- Michelle Turner