What Happened?
Shares of electronic measurement provider Keysight (NYSE:KEYS) jumped 11.7% in the morning session after the company reported strong third-quarter results, exceeding Wall Street's sales and earnings forecasts. Orders were strong, up sequentially, and ahead of analysts' expectations, driven by robust AI-related demand and strong year-end bookings in U.S. Aerospace, Defense, and Government businesses. However, there was a slight shortfall in backlogs compared to expectations, though it did not offset the positive momentum. Management noted that the demand environment might remain mixed, at least in the short term. Encouragingly, the company was able to provide solid guidance for the next quarter, with sales and EPS forecasts ahead of consensus estimates. Zooming out, we think this was a very solid quarter, highlighting the company's strong execution and resilience.
Is now the time to buy Keysight? Access our full analysis report here, it’s free.
What The Market Is Telling Us
Keysight’s shares are not very volatile and have only had 4 moves greater than 5% over the last year. Moves this big are rare for Keysight and indicate this news significantly impacted the market’s perception of the business.
Keysight is up 3.8% since the beginning of the year, and at $161.37 per share, it is trading close to its 52-week high of $165.42 from November 2024. Investors who bought $1,000 worth of Keysight’s shares 5 years ago would now be looking at an investment worth $1,501.
Today’s young investors won’t have read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.