Teradyne (TER) stock surged nearly 12% to a record high of $358.29 on Wednesday, driven by news of Intel's reported involvement in Elon Musk's advanced semiconductor manufacturing initiative, the Terafab project. The move placed TER at the top of the S&P 500 gainers for the day and extended its year-to-date gain to 85%.
The catalyst was Intel's entry into Terafab, a project also involving SpaceX, xAI, and Tesla, which aims to produce 1 terawatt per year of compute power for AI and robotics. Intel is a major customer of Teradyne, alongside Samsung, Qualcomm, Texas Instruments, and IBM, making its deepened commitment to advanced chip manufacturing particularly significant for Teradyne's business outlook.
Concurrently, Intel (INTC) stock itself soared, closing at a five-year high after a six-day rally that added 43% to its value. The surge was fueled by the Terafab announcement and a separate deal where Intel repurchased Apollo Global Management's stake in its Irish chip factory, which alone caused a 9% stock jump. Over the past 12 months, Intel's stock is up more than 170%.
Teradyne's strategic pivot towards AI is evident in its financials, with AI now accounting for over 60% of total revenues, a figure expected to exceed 70% in early 2026. The company recently launched two new platforms, Photon 100 for silicon photonics and Omnyx for AI and data center PCB assemblies, to capitalize on this demand.
Despite the rally, analyst sentiment remains measured. Wall Street's average price target for TER is $313.20, implying a potential 12.6% downside from its current record high, with a consensus rating of Moderate Buy. For Intel, analysts highlight ongoing concerns including falling revenue, a 40.1% annual decline in EPS over five years, and negative free cash flow, even as the stock trades at a forward P/E of 117.4x.
