Teradyne (TER) and Advanced Micro Devices (AMD) are key suppliers of AI components in the semiconductor market, with a global semiconductor market size projected to reach $2,062.59 billion by 2032. TER supplies critical automated test equipment for AI chips, while AMD designs high-performance CPUs and GPUs for AI workloads.

Teradyne is seeing growth in Semiconductor Test revenues due to strong AI-related demand, with a focus on AI-driven technologies and testing solutions. The company’s expanding portfolio includes the UltraFLEXplus system for high-performance processors and networking devices crucial for AI applications.

Advanced Micro Devices is expanding its data center AI business with products like the Instinct MI350 Series GPUs and upcoming MI400 Series accelerators. The company’s partnership with HPE for the “Helios” AI architecture and OpenAI for Instinct GPUs deployment is expected to generate significant revenues.

In terms of stock performance, TER shares have rallied 123.4% in the past six months, while AMD shares have risen by 64.7%. Both companies are currently overvalued, with TER trading at a higher Price/Sales ratio than AMD.

Earnings estimates for 2025 show a positive outlook for both TER and AMD, with TER expected to see a 9.01% year-over-year rise in earnings, while AMD is projected to have a 19.64% increase. TER has a higher average earnings surprise compared to AMD.

Teradyne is positioned for higher growth potential in the AI semiconductor market, while AMD’s expanding portfolio and data center AI business are expected to drive top-line growth. Despite competition from NVIDIA, AMD’s collaborations with major players in the AI industry are promising.

Teradyne carries a Zacks Rank #2 (Buy), indicating a stronger pick compared to AMD’s Zacks Rank #3 (Hold). Both companies have significant potential in the booming AI semiconductor market, with Teradyne offering higher growth prospects based on earnings surprises and a diversified AI-focused portfolio.

Read more at Nasdaq: TER vs. AMD: Which AI Component Supplier Stock Is the Better Buy?