Teradyne (TER) outlined an expanding artificial intelligence footprint at the Goldman Sachs Communacopia + Technology Conference on Wednesday, describing accelerating penetration into cloud compute and custom silicon accounts that are reshaping its revenue trajectory.
Revenue for the latest twelve months rose 58% year-over-year to $4.5 billion, while gross profit margin held at 59%—within the company's stated 59% to 61% range. Operating expenses are being constrained to grow at less than half the rate of revenue, CEO Greg Smith said during the session moderated by Goldman Sachs semiconductor analyst Jim Schneider.
Teradyne derives roughly 80% of revenue from semiconductor test, with robotics and product test each accounting for approximately 10%. The company has already achieved majority share in its first cloud compute hyperscaler account, a milestone reached after qualifying as a second source in 2023 when semiconductor test represented just 4% of total semiconductor capital expenditure.
By the first five months of 2026, that share had doubled to 8%, reflecting rising test intensity as process nodes compress from 3 nanometers toward 1.4 nanometers. The company also entered solid-state drive test with PCIe 6.0 support in 2026.
A key growth vector is merchant compute. After being invited to qualify as a second vendor in mid-2025, Teradyne shipped an initial part to the account in early 2026, loading it on a small fleet of testers. The company targets roughly 30% share of the compute portion over three to five years. Qualifications for the project device are expected to be completed in the second half of 2026.
Custom AI hyperscaler test equipment carries an annual total addressable market of hundreds of millions of dollars to $1 billion per customer, according to the company. High bandwidth memory remains a growth pillar: 2024 was characterized as an initial capacity ramp phase, while 2025 saw flat year-over-year HBM TAM. In 2026, HBM is experiencing strong growth as the memory market shifts toward cloud and data center demand. The company anticipates a transition toward modest HBM growth alongside strong DRAM and flash growth in 2027, with revenue acceleration relative to 2026.
Co-packaged optics test equipment presents a longer-term opportunity. The 2026 TAM stands at $100 million, rising to $300 million–$700 million by 2028 and approaching $1 billion by 2030. Teradyne holds strongest positioning at two of four insertion points—silicon photonics with bonded electronics and assembled co-packaged optics devices—while Advantest leads at the photonics wafer test stage.
Total semiconductor capital spend, approximately $120 billion in 2025, is projected to reach $250 billion to $300 billion over the 2028–2030 period, providing a larger underlying base for test equipment demand.
In robotics, a marquee e-commerce logistics customer tripled revenue from 2025 to 2026 and is expected to triple again from 2026 to 2027. The company's physical AI initiatives target automation bottlenecks including floppy cables, thermal interface materials, adhesives, screwed fasteners and short product life cycles.
Shares have gained 226% over the past year and are up 98% year-to-date, trading near $384.
