Key Stats for Keysight Technologies Stock
- Price change for Keysight Technologies stock: 23%
- $KEYS Share Price as of Feb. 23: $245
- 52-Week High: $248
- $KEYS Stock Price Target: $227
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What Happened?
Keysight Technologies stock (KEYS) is up more than 23% at the time of writing after the company crushed first-quarter earnings expectations and raised its outlook for the rest of the year.
- The electronics test and measurement equipment maker reported adjusted earnings of $2.17 per share on revenue of $1.60 billion.
- Both numbers sailed past Wall Street’s estimates of $2.00 per share on revenue of $1.54 billion.
- Revenue jumped 23% year over year, while adjusted earnings per share climbed 19%.
What really caught investors’ attention was the strength across Keysight’s business. The company posted record results driven by surging demand tied to AI infrastructure buildouts, defense modernization, and semiconductor innovation.
Orders grew an even more impressive 30% year over year to $1.65 billion, signaling strong momentum heading into the rest of the fiscal year.
CEO Satish Dhanasekaran highlighted the broad-based nature of the growth during the earnings call.
- He noted that AI-related revenue, which was about 10% of total company revenue last year, grew significantly faster than the company average this quarter.
- The number of customers contributing to AI-related demand has also doubled, showing the business is expanding beyond just a handful of hyperscalers.
- The company’s wireline business was a major standout. For the first time ever, wireline orders surpassed wireless orders, driven by explosive demand for AI data center infrastructure.
- Companies are racing to build out massive AI clusters, and Keysight’s tools help them design and validate everything from high-speed chips to optical interconnects and networking equipment.
- Keysight is benefiting from four key trends in AI infrastructure.
- First, hyperscalers are aggressively scaling AI systems, which creates more demand for testing across the entire stack.
- Second, the industry is moving to faster speeds like 800 gig and 1.6 terabit optics, with 3.2 terabit already in development.
- Third, optical interconnects are becoming more important as data centers look to reduce power consumption.
- Fourth, customers need system-level validation tools to stress-test entire AI clusters before deployment.
- The defense business also had a blowout quarter with record orders. Growth came from all regions, but Europe was particularly strong as countries increase defense spending in response to geopolitical tensions.
- Keysight’s recent acquisition of Spirent’s positioning, navigation, and timing (PNT) business is already paying off, adding capabilities that defense customers need for anti-jam and anti-spoof testing.
- Even the company’s Electronic Industrial Solutions Group, which serves semiconductors, automotive, and general electronics markets, posted double-digit revenue growth.
- For the second quarter, Keysight Technologies stock investors should expect revenue between $1.690 billion and $1.710 billion, representing 30% growth at the midpoint.
- Adjusted earnings per share are expected between $2.27 and $2.33, up 35% year over year at the midpoint.
- Looking at the full fiscal year 2026, management now expects total revenue and earnings growth “just above 20%” on an all-in basis.
CFO Neil Dougherty emphasized that Keysight delivered 41% incremental operating leverage this quarter despite absorbing the impact of tariffs.
The company’s recent acquisitions are dilutive to margins in the near term but are expected to become accretive once the company realizes $100 million in cost synergies.
Free cash flow was also strong at $407 million. The company ended the quarter with $2.20 billion in cash and repurchased $87 million worth of stock.
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What the Market Is Telling Us About Keysight Stock
The 23% pop in Keysight Technologies stock shows investors are excited about the company’s positioning in high-growth markets like AI and defense.
The combination of strong order growth, broad-based demand, and raised guidance suggests the momentum is sustainable.
What’s particularly encouraging is that the company is seeing demand across its entire customer base, from hyperscalers to chip designers to defense contractors to manufacturers throughout the supply chain.
Geographic diversification is also improving, with more business coming from international markets.
Keysight Technologies stock has now gained over 45% year to date, performing well.
The strong fundamentals, expanding market opportunities, and improving visibility make the stock attractive to investors seeking exposure to secular trends in AI infrastructure and advanced technology.
For long-term investors, Keysight’s differentiated portfolio and early engagement with customers designing next-generation systems should continue driving growth well beyond this fiscal year.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
