Cathie Wood’s 5 Biggest AI and Data Center Stock Picks

4. Teradyne Inc (NASDAQ:TER)

Cathie Wood’s Stake: $456,077,004 

Teradyne Inc (NASDAQ:TER) is perhaps the most notable AI pick in Cathie Wood’s portfolio. Its bull case is simple: with everyone going hungry for AI chips, there is huge demand for testing these chips before deploying them into critical AI infrastructure like data centers, GPUs, and high-performance computing systems. As AI chips become more complex, testing becomes more important and more valuable per chip. Teradyne Inc (NASDAQ:TER) does not have strong competition. The semiconductor automated test equipment market is dominated by two players: Teradyne and Advantest.

As companies deploy AI chips in critical applications, this hardware would require significantly more testing than traditional chips. For example, high-bandwidth memory (HBM), which is used in nearly every AI accelerator, can require up to 10x more test intensity compared to standard DRAM, effectively expanding Teradyne Inc’s (NASDAQ:TER) revenue opportunity per unit.

For the company, AI demand represents over 60% of revenue and is expected to reach around 70% in the upcoming quarters.

JP Morgan recently upgraded Teradyne Inc (NASDAQ:TER) to Overweight following the stock’s post-earnings decline. The firm said nothing structurally changed in the long-term story.

Carillon Eagle Mid Cap Growth Fund stated the following regarding Teradyne, Inc. (NASDAQ:TER) in its Q1 2026 investor letter:

“Teradyne, Inc. (NASDAQ:TER) designs and manufactures testing equipment for semiconductors. Investors have appreciated its strong position in testing for next-generation memory and application specific integrated circuit (ASIC) testing for AI workloads. Additionally, there is potential for the company to gain market share with the largest semiconductor company in the world.”