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Teradyne is a high-quality, cyclical business and the operating fundamentals are respectable: FY2025 revenue grew 13.1% to $3.19B, gross margin is a healthy 58.2%, operating margin 20.4%, and ROE is a solid 19.8% with liabilities/equity of just 0.50x. The 10-K narrative is real, not hype — Semiconductor Test posted considerable growth on AI networking and VIP compute demand, HBM/DRAM final-test share gains held memory revenue stable, Product Test grew on defense/aerospace, Robotics strung together three sequential quarters of growth, and the January 2026 MultiLane JV targets AI data-center high-speed I/O test. This is a credible AI-infrastructure pick-and-shovel story.

The problem is price, not the business. At $437.92 the stock trades at 126.2x FY diluted EPS of $3.47 and 21.5x sales — multiples that imply years of explosive, sustained acceleration. The actual earnings power does not corroborate that: net income rose only 2.2% to $554M and EPS just 4.5% (flattered by a 3.2% share-count reduction). Step back across the cycle and it's starker — 2025 revenue ($3.19B) is still below the 2021 peak ($3.70B), and 2025 net income ($554M) is barely half the 2021 figure ($1.01B). You are paying a top-of-cycle, peak-multiple price for a company that hasn't yet exceeded its prior peak in either revenue or profit.