Teradyne, Inc. (TER): A Bull Case Theory

We came across a bullish thesis on Teradyne, Inc. on Make Money, Make Time’s Substack by Oliver | MMMT Wealth. In this article, we will summarize the bulls’ thesis on TER. Teradyne, Inc.'s share was trading at $139.30 as of October 16th. TER’s trailing and forward P/E were 50.18 and 29.07 respectively according to Yahoo Finance.

TER Holdings (TER) has built a strong foundation in automatic test equipment (ATE) and industrial automation solutions, initially supplying semiconductor test systems to chipmakers. Over the last decade, the company has strategically diversified into robotics and industrial automation, positioning itself to benefit from both the ongoing semiconductor cycle and the broader structural shift toward automation. While TER’s automation segment currently contributes only around 20% of revenue, it represents the primary driver of future growth.

This expansion was accelerated through acquisitions of Universal Robots (UR) and Mobile Industrial Robots (MiR), establishing a robotics business that spans multiple high-value areas. Universal Robots produces collaborative robotic arms for tasks such as assembly, machine tending, and packaging, while MiR develops self-driving robots for moving goods in factories, warehouses, and hospitals. TER also leverages advanced motion control and path-planning software through Energid, enabling robots to perform complex, precise tasks, and AutoGuide produces autonomous mobile robots (AMRs) designed for heavy payloads in automotive, aerospace, and large-scale manufacturing applications.

Despite its growth potential, TER currently trades at 6.7x NTM sales and 25.2x NTM EBITDA, with expected revenue growth of 2.6% in FY25 and 19.4% in FY26, and EBITDA growth of 36% in FY26, making it moderately valued. Technically, the stock appears overextended, and a pullback to the $120 range, where NTM EBITDA multiples would be closer to 18–20x, could present a more attractive entry point. Overall, TER offers compelling long-term upside driven by industrial automation and robotics, but near-term investors may benefit from patience as the market aligns with its growth trajectory and valuation potential.

Previously we covered a bullish thesis on Lam Research Corporation (LRCX) by The Antifragile Investor in May 2025, which highlighted its essential role in semiconductor manufacturing, high-margin services, and a strong moat from patents and R&D. The company's stock price has appreciated approximately by 71.96% since our coverage. Oliver | MMMT Wealth shares a similar perspective but emphasizes TER’s growth through robotics and industrial automation.

Teradyne, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 60 hedge fund portfolios held TER at the end of the second quarter which was 49 in the previous quarter. While we acknowledge the potential of TER as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.