Better than expected testing demand related to 5G has been a real boon for Teradyne (TER)
this year, driving meaningfully higher demand for system-on-a-chip (or
SoC) testing, including better-than-expected results in the third
quarter and much, much better guidance for the fourth quarter. With
that, the company is on pace for roughly 7% growth this year, against
expectations at the start of the year for a modest decline due to the
wider slowdown in the chip sector, and the shares are at their highest
level in almost 20 years.
I underestimated the
near-term demand for 5G infrastructure testing and the extent to which
it would drive such a strong second half, but the valuation multiples
are about double the long-term norm now, and while Teradyne should see
several years of double-digit growth, the market seems to be more than
fully pricing that into the shares today.
Read the full article here:
Teradyne At A 15-Year High On Strong 5G Demand
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