We recently published a list of 10 AI News Making Waves on Wall Street. In this article, we are going to take a look at where Teradyne, Inc. (NASDAQ:TER) stands against other AI news making waves on Wall Street.
Semiconductor Trends Show AI as a Key Driver
Chris Caso, a senior analyst at Wolfe Research, discussed key trends in the semiconductor industry in an interview with CNBC. He highlighted TSMC’s strong performance. While the company’s recent results are largely driven by older chips, it is forecasting 25% revenue growth in 2025, with 60% of that tied to AI. Caso noted that AI is the primary growth driver for the industry, while demand for other segments like PCs, handsets, and traditional servers remains sluggish due to inventory build-ups during the pandemic.
Regarding U.S.-China tensions, Caso mentioned that U.S. export controls have effectively limited China’s access to advanced chip manufacturing and AI technologies. He characterized China’s retaliatory actions as attempts to respond where possible.
Broad Market Growth Opportunities with AI Advancements
Joe Davis, Vanguard’s Global Chief Economist, advised against focusing solely on tech stocks to capitalize on AI-driven growth in an article posted on January 14. Instead, he recommends diversifying across the U.S. equity market to capture productivity gains in sectors like healthcare, finance, and manufacturing. Tech stocks, already highly valued, may not provide the best opportunities for growth.
Davis noted that past technological shifts spurred growth across multiple industries, not just their core sectors. If AI’s impact is slower than expected (30%-40% likelihood), fixed-income or value stocks may offer better returns in a low-growth environment. For a balanced strategy, Davis suggested investing in a broad U.S. stock market index fund or working with skilled managers to identify long-term winners, preparing for both AI’s potential and the possibility of slower adoption.
For this article, we selected AI stocks by reviewing news articles, stock analysis, and press releases. We listed the stocks in ascending order of their hedge fund sentiment taken from Insider Monkey’s database of 900 hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A team of engineers discussing around a fully-equipped flex test platform system.
Teradyne, Inc. (NASDAQ:TER)
Number of Hedge Fund Holders: 43
Teradyne, Inc. (NASDAQ:TER) creates automated test systems and robotic solutions, specializing in AI-powered technologies for semiconductor evaluation, wireless testing, and manufacturing operations.
On January 21, Morgan Stanley downgraded Teradyne (NASDAQ:TER) to Underweight from Equal-weight, cutting the price target to $117 from $121. The firm noted that Teradyne has lost market share to Advantest, especially in HPC and DRAM, while growth in its key markets like smartphones and NAND has stalled. The firm doesn’t expect this trend to reverse through 2025-2026 and believes the company’s and Wall Street’s growth expectations are overly optimistic. Despite growth in AI ASIC and Apple, these developments aren’t enough to significantly impact the broader test market. Morgan Stanley forecasts slower revenue growth for Teradyne and expects the company to lower its 2025-2026 targets in its upcoming earnings report.
Overall, TER ranks 8th on our list of AI news making waves on Wall Street. While we acknowledge the potential of TER as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than TER but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap
Disclosure: None. This article is originally published at Insider Monkey.
