What Happened?
A number of stocks jumped in the afternoon session after industry leader and peer AMD reported strong earnings, confirming that AI infrastructure spending is real.
AMD's Data Center revenue rose 57% year over year to $5.8 billion, beating estimates by $400 million. Chip companies sell into a supply chain: raw materials become wafers, wafers become chips, chips go into servers and devices. AI is currently driving nearly all of the industry's growth because building AI systems requires massive amounts of specialized chips, graphics processors and high-bandwidth memory in particular.
When a major chip company reports strong AI data center sales, it signals that the large technology companies building AI infrastructure, called hyperscalers, are still spending heavily. That spending flows through the entire supply chain, from wafer makers to packaging companies to the chip designers themselves.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Semiconductor Manufacturing company Nova (NASDAQ:NVMI) jumped 3.1%. Is now the time to buy Nova? Access our full analysis report here, it’s free.
- Semiconductor Manufacturing company Teradyne (NASDAQ:TER) jumped 5.5%. Is now the time to buy Teradyne? Access our full analysis report here, it’s free.
Zooming In On Teradyne (TER)
Teradyne’s shares are extremely volatile and have had 37 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 6 days ago when the stock gained 13.8% on the news that the company reported record-breaking first-quarter 2026 financial results that surpassed analyst expectations, driven by strong demand for artificial intelligence applications.
Teradyne announced total revenue of $1.282 billion, an 87% increase year-over-year, and a new company record. Earnings per share (EPS) came in at $2.56, beating forecasts of $2.08 and marking a 241% jump from the previous year. The impressive growth was largely fueled by its Semi Test segment, which saw revenues exceed $1 billion for the first time. Highlighting the increasing adoption of AI, the company noted that AI-related revenue now makes up nearly 70% of its total revenue, an increase from about 60% in the previous quarter.
Teradyne is up 83% since the beginning of the year, but at $379.75 per share, it is still trading 9.2% below its 52-week high of $418.08 from April 2026. Investors who bought $1,000 worth of Teradyne’s shares 5 years ago would now be looking at an investment worth $3,015.
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