Teradyne shares fall 10.63% amid tech selloff ahead of earnings
Key Facts
Teradyne shares fell 10.63% in the October 22, 2026 session to close at $308.75 amid a selloff in technology stocks and ahead of the company's third-quarter earnings report. According to S&P Global Market Intelligence data displayed on Stock Analysis, the stock lost $36.74 during the session. It hit an intraday low of $306.84 before ending trading above that level. Its decline coincided with a 2.6% drop in the Nasdaq Composite, according to the Associated Press, in a session marked by pressure on technology stocks. Teradyne's losses outpaced the index's decline as selling also hit shares of other semiconductor equipment companies.
In the same sector, Lam Research shares fell 11.8% during the session, according to the Associated Press, despite the company's earnings and revenue beating analysts' expectations. The midpoint of its guidance range for upcoming earnings came in slightly below expectations, coinciding with the sharp share-price decline. The news agency linked pressure on AI stocks to concerns about the rising cost of borrowing to finance data centers and chip purchases. In describing those concerns, it cited "how expensive it is to borrow money," as funding needs for AI infrastructure persist. Alongside financing costs, the agency cited concerns about elevated stock valuations among the factors weighing on this part of the technology market.
Teradyne's decline follows growth in its business during the first half of 2026, according to its financial disclosures, with first-quarter revenue reaching $1.282 billion. That represented an 87% year-on-year increase, according to the quarter's earnings release. The company then reported second-quarter revenue of $1,329 million, exceeding the previous quarter's level. Second-quarter revenue grew 104% year on year, a faster pace than the growth reported in the first quarter. In the first-quarter earnings release, Chief Executive Greg Smith said "approximately 70% of our revenue is tied to AI-related demand," outlining the extent of the company's exposure to that demand before the latest selloff.
On its business drivers, Teradyne said in its second-quarter earnings announcement that memory test revenue reached a record during the period. It attributed the performance to continued strong demand in dynamic random-access memory, alongside renewed final-test activity for flash memory. In AI chips, the company announced that its Titan HP platform was expanding its capabilities for testing the reliability of these chips. The platform enables thermal stress testing as well as system-level testing, among the testing capabilities presented by the company. Teradyne said the enhanced version of the platform was already available and in use in production as part of its testing business for AI chips used in data centers.
The guidance Teradyne issued with its second-quarter results puts third-quarter revenue in a range of $1,200 million to $1,300 million. The entire range is below second-quarter revenue, despite the strong year-on-year growth the company recorded in that period. On earnings, Teradyne forecast adjusted diluted earnings per share of $1.85 to $2.15 for the third quarter. Smith said in the statement: "In the near term, our third-quarter guidance reflects strong AI-related demand." That was management's assessment of demand when it issued guidance alongside its previous results, ahead of the forthcoming disclosure of actual third-quarter performance.
Alongside its operating activities, Teradyne agreed in October to invest approximately $300 million in cash in FormFactor shares, according to a disclosure by the latter. The transaction is expected to close in the fourth quarter of fiscal 2026, subject to customary closing conditions. On its upcoming reporting schedule, Teradyne set October 27, 2026 for the release of its third-quarter results. The company said the announcement would be issued at or after 4:30 p.m. Eastern Time. The release will be followed by a call to discuss the results and business outlook on October 28, 2026 at 8:30 a.m. Eastern Time.