Why Teradyne Stock Slumped This Week (Hint: Tariffs Are Starting to Hurt)

Core Viewpoint - Teradyne's shares declined by 21.4% following a negative update on trading conditions during its analyst day presentation, indicating significant market concerns about future performance [1]. Company Summary - Teradyne operates primarily in the automated test systems market for semiconductors and data electronics, which are cyclical and influenced by capital spending in key industries such as consumer electronics, industrial, automotive, aerospace, and defense [2]. - The company has revised its second-quarter and full-year revenue guidance downward due to uncertainties surrounding tariffs and trade restrictions, reflecting a slowdown in demand [2][4]. - The revised second-quarter revenue growth is now expected to be flat to down 10% from the first quarter, a significant change from the previous expectation of 5% to 10% growth [4]. - Full-year revenue growth is now projected to be up 5% to 10%, down from an earlier expectation of 15% [4]. Market Conditions - Management noted that while there have been no cancellations, there are delays and reviews of capital spending, which could indicate a broader trend of potential cancellations starting with push-outs [3]. - The macroeconomic uncertainty is affecting corporate and consumer decision-making, as seen in other companies like Delta Air Lines and 3M, which have also reported near-term impacts on their businesses [4].