Is Wall Street Underestimating This Under-The-Radar AI Stock Pick in Cathie Wood’s Portfolio?

Published on May 11, 2026 at 9:48 am by Fahad Saleem in News

We just covered Cathie Wood’s 11 Biggest AI and Data Center Stock Picks. Teradyne, Inc. (NASDAQ:TER) ranks #4 (see Cathie Wood’s 5 Biggest AI and Data Center Stock Picks).

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” (Click Here to Read the Letter in Detail)