Hedge Funds Were Loading Up On This Cathie Wood Stock For 2026

Teradyne (NASDAQ:TER) is one of the Cathie Wood 2026 Portfolio: 10 Best Stocks to Buy.

Automated test equipment and robotics company Teradyne (NASDAQ:TER) ranks ninth in our list of the best stocks to buy for 2026 according to Cathie Wood. ARK has a $456.08 million stake in Teradyne (NASDAQ:TER) as of the end of December. A total of 77 hedge funds in Insider Monkey’s database of over 1,000 funds had a stake in the company as of the end of the December quarter, sharply up from 58 funds the prior quarter.

What’s causing hedge funds to load up on Teradyne (NASDAQ:TER)?

Once seen as a cyclical play, Teradyne (NASDAQ:TER) is transitioning away from the smartphone chip market to testing equipment for AI infrastructure. Its UltraFLEXplus and Magnum 7 testing systems are seeing strong demand, resulting in revenue and margin growth. With AI data centers starting to hit limits due to copper electrical connections, Teradyne (NASDAQ:TER) is positioned to benefit from the industry’s shift towards optical interconnects and silicon photonics. Why? Teradyne (NASDAQ:TER) testing systems can verify these complex next-generation chips before they are deployed in crucial data centers.

Carillon Eagle Mid Cap Growth Fund stated the following regarding Teradyne, Inc. (NASDAQ:TER) in its fourth quarter 2025 investor letter:

“Teradyne, Inc. (NASDAQ:TER) is a semiconductor testing equipment supplier. Shares rose after the company reported very strong results on the back of strong demand for test equipment for artificial intelligence (AI)-related semiconductors. The company is also seeing potential market share gains that likewise could support revenue growth in 2026.”

While we acknowledge the risk and potential of TER as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than TER and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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