• In May 2026, Keysight Technologies reported record fiscal second-quarter results, with sales rising to US$1,717 million and net income reaching US$349 million, alongside higher earnings per share versus a year earlier.
• These results were underpinned by strong demand from AI data centers and other advanced test markets, prompting Keysight to lift its full-year 2026 revenue growth outlook to the high 20s percent range.
• With Keysight raising its 2026 growth outlook on robust AI and data center demand, we’ll examine how this shifts its investment narrative.

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Keysight Technologies Investment Narrative Recap

To own Keysight today, you need to believe its test and measurement franchise can keep benefiting from AI data center buildouts, next generation networking and growing software and services, while managing new tariff costs and end market cyclicality. The record Q2 results and upgraded 2026 revenue growth outlook sharpen the near term catalyst around AI driven orders, but they also heighten the key risk that a slowdown or normalization in AI infrastructure spending would quickly feed through to growth and margins.

The launch of Keysight’s PCIe 7.0 receiver test solution sits right at the heart of this AI and high speed networking story, since it targets 128 GT/s validation for next generation compute and data center hardware. By extending coverage from transmitter to receiver, it supports the company’s push to stay embedded in AI servers and 1.6T interconnects, reinforcing the catalyst that advanced test capability can sustain demand even as customers push into faster Ethernet and more complex architectures.

Yet investors should also be aware that if AI centric data center orders slow or customers adopt in house tools, the impact on Keysight’s growth profile could be...

Keysight Technologies' narrative projects $7.9 billion revenue and $1.5 billion earnings by 2029. This requires 11.7% yearly revenue growth and an earnings increase of about $0.5 billion from $981.0 million today.

Uncover how Keysight Technologies' forecasts yield a $323.00 fair value, a 6% downside to its current price.

Exploring Other Perspectives

The most bearish analysts were already assuming only about 9.9 percent annual revenue growth to roughly US$7.5 billion and earnings near US$1.5 billion by 2029, so if AI test demand stays concentrated among a few hyperscalers or they shift to in house tools, their more pessimistic view on Keysight’s AI driven orders and margins could end up closer to reality than the consensus, and this latest AI fueled quarter may push both narratives to be revisited.

Explore 4 other fair value estimates on Keysight Technologies - why the stock might be worth as much as $323.00!

Form Your Own Verdict

Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts.

• A great starting point for your Keysight Technologies research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.
• Our free Keysight Technologies research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Keysight Technologies' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.