Teradyne Drives Robotics Growth With AI: A Sign for More Upside?

Teradyne TER is benefiting from the growing integration of AI into robotics, which is driving incremental growth in its Robotics division. In the third quarter of 2025, more than 8% of robotics sales were for AI-related products, up from 6% in the second quarter of 2025, showcasing the increasing adoption of AI features in robotics.

The company is focusing on establishing its Universal Robots (UR) cobots as the preferred platform for AI-driven work cell applications and enhancing the performance of its Autonomous Mobile Robots (AMRs) with advanced AI features.

AI is contributing to growth of Teradyne’s service revenue within the Robotics division. The company is providing value-added services to its installed base of over 100,000 robots, with service revenue accounting for 14% of robotics sales in the third quarter of 2025, up from 12% in the second quarter of 2025. This highlights Teradyne’s commitment to expanding its revenue streams within the robotics segment.

Robotics is positioned as a key growth area for Teradyne, with a focus on AI-driven applications and expanding customer channels. The company expects robotics growth to continue, though slowly, as it recovers from a low point in the first quarter of 2025. The company predicts a seasonal increase in the fourth quarter of 2025 due to higher demand for automation solutions.

Teradyne Suffers From Stiff Competition

Teradyne is facing stiff competition from the likes of ABB ABBNY and Advantest Corporation ATEYY. Both ABB and Advantest are expanding their footprint in the AI space.

ABB’s expanding portfolio has been noteworthy. In December 2025, ABB invested in UK-based OctaiPipe through ABB Motion Ventures. They plan to use on-premise, AI-driven cooling optimization software that can reduce data center cooling energy use by up to 30%. This approach improves efficiency, resilience, and sustainability without the need for new hardware.

Advantest’s expanding footprint in the AI infrastructure space has been a key catalyst. In December 2025, Advantest announced the M5241 Memory Handler. This new, high-speed, temperature-controlled solution is made for AI and high-performance memory testing. The first shipments are planned for the second quarter of 2026.

TER’s Share Price Performance, Valuation, and Estimates

Teradyne shares have surged 150.3% in the trailing six-month period, outperforming the Zacks Computer & Technology sector’s rise of 18.8% and the Zacks Electronics - Miscellaneous Products increase of 25.8%.

TER Stock's Performance

TER stock is trading at a premium with a forward 12-month Price/Sales of 9.62X compared with the Electronics - Miscellaneous Products industry’s 6.95X. TER has a Value Score of D.

TER's Valuation

The Zacks Consensus Estimate for fiscal 2025 earnings is pegged at $3.51 per share, unchanged over the past 30 days. This suggests 9.01% year-over-year growth.

Teradyne, Inc. Price and Consensus

Teradyne, Inc. price-consensus-chart | Teradyne, Inc. Quote

Teradyne currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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