Keysight Technologies (KEYS) is back in focus after record fiscal third quarter results and a higher outlook for 2026, driven by strong demand tied to AI infrastructure, data centers and advanced communications.

Despite the strong fiscal third quarter and raised outlook, Keysight Technologies' recent share price return has cooled, with the stock down 11.65% over the past week and 8.78% over the past 90 days. However, the year-to-date share price return of 53.02% and 1-year total shareholder return of 89.45% point to strong longer term momentum.

If you are watching how AI infrastructure demand is reshaping opportunities beyond Keysight, it may be worth scanning a wider set of potential ideas through the 55 AI infrastructure stocks

Keysight Technologies is delivering strong business results in AI testing and data centers. After a sharp multi-year run and a recent pullback, the key question is whether the current share price still represents fair value.

Most Popular Narrative: 23.8% Undervalued

The most followed narrative currently places Keysight Technologies' fair value at $415.08, above the last close of $316.13. That gap rests on some punchy growth and margin assumptions that go well beyond the recent quarter.

Expansion of software and recurring service offerings, now comprising 36% and 28% of total revenue respectively, increases gross and net margins by enhancing revenue stability, improving product mix, and reducing cyclicality from traditional hardware segments.

Want to see what is behind that margin story for Keysight Technologies? The narrative blends higher software mix, faster earnings growth and a richer future profit multiple. Curious which specific revenue and profit paths need to play out to support that fair value.

Result: Fair Value of $415.08 (UNDERVALUED)

However, the Keysight Technologies story could shift if new tariffs squeeze margins more than expected, or if AI data center spending cools faster than analysts currently assume.

Another View on Keysight Technologies Valuation

The first narrative frames Keysight Technologies as 23.8% undervalued, based on future earnings and margin expansion. Yet the current P/E of 42.1x is higher than the estimated fair ratio of 36.6x and also above the US Electronic industry average of 30.3x. That points to a richer price tag that could matter if expectations change.

Before leaning too heavily on any one fair value estimate, it can help to see what the numbers imply when earnings multiples move closer to that fair ratio or industry level. See what the numbers say about this price — find out in our valuation breakdown.

Next Steps

Given the mixed sentiment around Keysight Technologies, it makes sense to move quickly and review the data for yourself, then weigh both sides through the 4 key rewards and 1 important warning sign.

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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.