Verdict: Mixed
Key finding: There is no Teradyne-specific news. TER is down ~7% with the whole chip-equipment group after Lam Research guided the December quarter only in line, citing component shortages and a meaningfully lower China share. TER's own numbers are the best in its test group (revenue +104% YoY, 32.9% op margin), and it reports in 3 sessions (10/27 after the close).
Scorecard
| Ticker | Rev last Q ($M) | Rev YoY last Q | Rev YoY prior Q | Gross margin (last Q, trend) | Op margin | EPS last Q vs yr ago | P/S | Mkt cap | 1-mo price % |
|---|---|---|---|---|---|---|---|---|---|
| TER | 1,329 | +103.9% | +87.0% | 59.8% (down from 60.9%) | 32.9% | 2.38 vs 0.49 | 11.1 | $49.3B | -9.4% |
| FORM | 258 | +31.9% | +32.0% | 50.7% (up from 47.9%) | 22.4% | 0.70 vs 0.12 | 8.8 | $7.9B | -6.0% |
| COHU | 149 | +38.4% | +29.3% | 45.4% (up from 40.5%) | 0.2% | -0.00 vs -0.36 | 4.5 | $2.4B | -8.8% |
| AEHR | 20 | +40.2% | -43.7% | 40.6% (up from 32.7%) | -5.0% | 0.05 vs -0.10 | 37.9 | $1.9B | -34.1% |
TER is the quality leader of the test group: revenue growth (+104%) is 3x the peers and op margin (32.9%) is the highest, with growth still accelerating (+87% to +104%). It is not the cheapest (P/S 11.1 vs FORM 8.8), and gross margin slipped 1.1 pts last quarter.
Move
- Prior close $345.49 (10/21). Opened $323.69 (-6.3%), low $312.95, $321.49 at 10:00 ET.
- All-time high $487.91 on 6/30: down ~34%. Yesterday's close was just above the 200-day average (~$346.7); today is below it. 100-day average ~$380.3.
- Today broke the 10/16 and 10/20 lows ($324.09 / $322.33). Next lows: $301.00 (7/28) and $296.82 (7/17).
Catalyst
- No Teradyne press release, filing or analyst note found for 10/22. The move is the group:
- Lam Research (10/21 AMC): record September-quarter revenue $8.22B and EPS $2.20, slightly ahead; December-quarter guide $8.6B +/- $0.4B, only ~$30M above consensus. CFO: revenue would have been higher without near-term component shortages; delayed December shipments move into March. China was 35% of revenue and is expected to be "meaningfully" lower in December. CEO still sees 2027 wafer-fab equipment spending above $200B. LRCX -7.5% today.
- Equipment and test peers today (FMP, ~10:00 ET): LRCX -7.5%, FORM -8.0%, COHU -6.7%, AMAT -4.8%, SMH -3.1%.
- (inference) Lam's problem is a supply bottleneck and China mix in deposition/etch tools; nothing reported says the same applies to Teradyne's semiconductor test business. The market is selling the group together.
Sector
- Chips have sold off for about a week and a half on rates/inflation, AI-spending doubts and China memory competition; the SOX had its steepest weekly drop since March 2025 last week (per Quartz / Yahoo coverage).
- SMH is testing the $532-536 July shelf today.
Risks
- Binary date: Q3 results Tuesday 10/27 after the close, call 10/28 8:30 ET. Lam's China and supply comments raise the odds of a cautious guide across the group (inference).
- Gross margin dipped last quarter (60.9% to 59.8%).
- Group de-rating: the stock is 34% off its high and below its 200-day; growth leaders fall with the sector in this tape.
- Valuation is not a veto here, but P/S 11.1 leaves less cushion than peers if guidance disappoints.
Judgement
Mixed. The drop is sympathy, not Teradyne news, and TER's own numbers are the strongest in the test group. But the sector reason is real (Lam's shortages and China), and TER's own answer comes in 3 sessions. On the facts available today, the business case is intact; whether this is an overreaction depends on the 10/27 report.
Sources
- https://finance.yahoo.com/markets/article/chip-stocks-fall-as-equipment-maker-lam-research-cites-supply-chain-constraints-130648719.html
- https://www.benzinga.com/analyst-stock-ratings/analyst-color/26/10/62524540/lam-research-sinks-guidance-cantor-top-pick
- https://www.investing.com/news/stock-market-news/why-is-lam-research-stock-sliding-today-93CH-4965056
- https://www.top1markets.com/news/lam-research-q1-fiscal-2027-earnings-stock-falls
- https://rallies.ai/news/us-chip-stocks-fall-after-fleeting-respite-in-previous-session-28efe8822362a93a
- https://qz.com/chip-stocks-trillion-ai-selloff-semiconductor-index-101426
- https://investingnews.com/teradyne-to-announce-third-quarter-2026-results/
- https://www.marketbeat.com/instant-alerts/price-teradyne-nasdaq-ter-stock-falls-43-time-to-sell-2026-10-07/