In This Article:
What Happened?
Shares of semiconductor testing company Teradyne (NASDAQ:TER) fell 20.2% in the morning session after the company lowered its guidance ahead of its Investor Day event (2025). Teradyne guided for sales to be flat to down 10% (vs previous revenue growth expectations of between 5% and 10%). Management cited uncertainty from tariffs and trade restrictions.
The shares closed the day at $87.07, down 17.1% from previous close.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Teradyne? Access our full analysis report here, it’s free.
What The Market Is Telling Us
Teradyne’s shares are quite volatile and have had 19 moves greater than 5% over the last year. But moves this big are rare even for Teradyne and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 8 months ago when the stock dropped 15.3% on the news that the company reported weak second-quarter earnings. Its revenue guidance for next quarter missed analysts' expectations. On the other hand, Teradyne recorded strong improvement in inventory levels, and its EPS outperformed Wall Street's estimates. The guidance weighed on shares, and the stock traded down as a result.
Teradyne is down 31.4% since the beginning of the year, and at $86.81 per share, it is trading 46.7% below its 52-week high of $163 from July 2024. Investors who bought $1,000 worth of Teradyne’s shares 5 years ago would now be looking at an investment worth $1,582.
Today’s young investors likely haven’t read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.