Teradyne's memory test business generated a record $212 million in the second quarter of 2026, the third consecutive quarter above $200 million. The figure anchors the company's push for share in semiconductor test equipment against KLA and Cohu, with high-bandwidth memory (HBM), DRAM and NAND demand tied to AI infrastructure driving the segment.

Memory book-to-bill exceeded 2 in the quarter, which the company reads as solid demand visibility. Management expects the 2026 memory test total addressable market to come in more than 40% higher than 2025, supported by HBM, DRAM and NAND growth. Memory revenues should grow in the second half of 2026 relative to the first half.

The revenue base rests on the Magnum platform line. Teradyne positions Magnum testers as swing tools: a single system combines memory and logic-test capability, letting memory manufacturers redeploy capacity between product types rather than commit capital to single-purpose testers.

Magnum E2 targets next-generation interfaces

Teradyne recently launched Magnum E2, a next-generation high-speed memory test system built for AI and high-performance computing workloads. The platform runs on the company's Near-DUT Test architecture and supports advanced DRAM and flash interfaces including LPDDR6, DDR6, GDDR7 and NAND flash.

Magnum E2 raises parallelism and signal integrity compared with prior generations and handles NRZ, PAM3 and PAM4 signaling. Because it combines memory and logic testing on one platform, manufacturers can run qualification through high-volume production without splitting flows across systems.

Technology transitions should expand the test load further. The moves from HBM3 to HBM4, DDR5 to DDR6 and the shift to next-generation flash each add test steps as bit production rises, increasing the number of test insertions per wafer and per package. Teradyne expects these transitions to support a wider memory-testing footprint through 2026 and beyond.

Competitive picture: KLA and Cohu

KLA reported record revenue of $3.66 billion in the fourth quarter of fiscal 2026, up 15% year over year and 7% sequentially. Management credited accelerating AI infrastructure investments, leading-edge foundry and logic demand, memory and advanced packaging, plus rising process-control intensity across memory and advanced packaging.

Cohu is building its position from a different angle. The company holds a place in HBM inspection through its Neon platform, which it is extending across HBM3, HBM4 and HBM4E production. Cohu is also funding development for HBM5 and later generations, alongside growing exposure to AI computing test demand and software.

All three companies are riding the same force: AI workloads are driving HBM volume, and HBM requires more inspection and test capacity per bit than conventional DRAM.

Valuation and estimates

Teradyne shares have gained 114.8% year to date, outperforming the Zacks Computer & Technology sector's 22.4% growth and the Zacks Electronics - Miscellaneous Products group's 43% increase.

That run has left the stock at a premium. TER trades at a forward 12-month price-to-sales ratio of 11.18X against the Electronics - Miscellaneous Products industry's 7.74X. The stock carries a Value Score of D.

The Zacks Consensus Estimate for 2026 earnings stands at $9.11 per share, unchanged over the past 30 days. That estimate implies 130.05% year-over-year growth. Teradyne currently carries a Zacks Rank #3 (Hold).

What to watch

Three numbers will indicate whether the memory momentum holds: quarterly memory revenue against the $200 million floor, the book-to-bill ratio staying above 2, and confirmation that the 2026 memory test TAM expansion exceeds 40%. Magnum E2 adoption among DRAM and NAND manufacturers — specifically qualification wins on LPDDR6 and DDR6 — will signal whether Teradyne converts the HBM4 transition cycle into sustained share gains against KLA's process-control strength and Cohu's inspection foothold.