Shares of Keysight Technologies (NYSE:KEYS) climbed 16.35% to $285 in premarket trading on Tuesday after the company released second-quarter guidance that outpaced Wall Street expectations.
Keysight said its forecast for adjusted earnings per share and revenue for the second quarter came in above analyst estimates compiled by LSEG. The company also noted that its outlook does not account for any potential effects from the U.S. Supreme Court ruling last week that struck down President Donald Trump’s IEEPA-based tariffs, nor for any follow-on measures from Washington DC.
Morningstar reported that company management nearly doubled its fiscal 2026 organic growth guidance and now anticipates more than 20% total reported growth for the year, with roughly 7% of that increase expected to come from acquisitions.
Brokerage research cited the source of the demand improvement as investments in AI infrastructure for chips and networking, in addition to stronger defense spending and defense modernization efforts. Following the company’s results and updated outlook, at least three brokerages raised their price targets on Keysight stock, including J.P. Morgan, Morgan Stanley and Barclays.
As of Monday’s market close, Keysight shares had gained 20.5% year to date, on top of a 26.5% rise recorded in 2025.
Summary
Keysight reported second-quarter guidance that beat LSEG analyst estimates, prompting a significant premarket share-price increase. Management increased its fiscal 2026 organic growth target substantially, projecting more than 20% total reported growth with about 7% attributable to acquisitions. Brokers responded by raising price targets, and the company noted its outlook excludes potential impacts from a recent Supreme Court decision and related Washington DC actions.
Key points
- Q2 adjusted EPS and revenue guidance exceeded analyst estimates compiled by LSEG.
- Management nearly doubled fiscal 2026 organic growth guidance and now expects over 20% total reported growth, including about 7% from acquisitions.
- Brokerages including J.P. Morgan, Morgan Stanley and Barclays raised price targets; shares were up 20.5% year to date as of Monday’s close.
Risks and uncertainties
- The company's outlook does not incorporate any potential impact from the U.S. Supreme Court ruling that struck down IEEPA-based tariffs or subsequent actions by Washington DC.
- The demand improvement cited by brokerages is tied to AI infrastructure investments for chips and networking, plus higher defense spending and defense modernization - factors that could affect future results if their trajectory changes.
Keysight’s market reaction reflects investor response to both the stronger-than-expected near-term guidance and the larger fiscal 2026 growth trajectory, as reported by Morningstar and noted by brokerage updates. The company and the analyst community will likely monitor developments around trade policy and the pace of AI and defense-related capital expenditure for signals on how durable the momentum may be.