11 Best Semiconductor Equipment Stocks to Buy According to Analysts

7. Teradyne, Inc. (NASDAQ:TER)

Average Upside Potential: ~52.4%

Number of Hedge Fund Holders: 61

Teradyne, Inc. (NASDAQ:TER) offers testing equipment, which includes automated test equipment for semiconductors system testing for hard disk drives, circuit boards, and electronics systems, and wireless testing for devices. Analyst Krish Sankar of TD Cowen maintained a “Buy” rating on the company’s stock. The analyst’s rating is backed by factors highlighting the growth potential and recovery. Despite the challenges, the company expects a recovery in H2 of the year, which can be driven by improvements in the semiconductor test market. As per the analyst, Teradyne, Inc. (NASDAQ:TER)’s long-term growth prospects are promising, with an emphasis on expanding the Industrial Automation division. The company continues to roll out new products and seeks to increase its market share and targets CAGR, which exceeds the industry peers, says Sankar.

Teradyne, Inc. (NASDAQ:TER) remains well-placed to benefit from the recovery in smartphone units and the higher adoption of leading-edge nodes in semiconductor manufacturing. The industrial sector, which includes automotive manufacturing, exhibits another area for potential growth. With industrial automation advancing and the automotive industry shifting toward electric and autonomous vehicles, the demand for semiconductor components in such applications can increase. This trend can also result in higher demand for Teradyne, Inc. (NASDAQ:TER)’s testing solutions.

Furthermore, the pivot to leading-edge nodes in semiconductor manufacturing throughout sectors can fuel demand for the company’s advanced testing equipment. Parnassus Investments, an investment management company, released its Q3 2024 investor letter. Here is what the fund said:

“Teradyne, Inc. (NASDAQ:TER), a supplier of automated test equipment for semiconductors, was affected by a broad sell-off in semiconductor-related stocks. We see some “green shoots” in demand and believe Teradyne is well positioned as artificial intelligence moves to smartphones and PCs.”