Keysight Technologies (NYSE: KEYS) saw its stock climb sharply in after-hours trading Tuesday after the electronic test and measurement company reported fiscal second-quarter results that surpassed Wall Street expectations. The company posted revenue of $1.72 billion and adjusted earnings of $2.87 per share, comfortably beating the consensus estimate of $2.33 per share. Orders surged to a record $2.05 billion, up from $1.32 billion in the same period a year earlier, signaling strong future demand.
The stock closed the regular session at $344.11, up 1.07%, and then jumped to approximately $357.80 in after-hours trading, representing a gain of nearly 4%. This move came despite a broader market decline, with the S&P 500 falling 0.67% and the Nasdaq Composite dropping 0.84% as rising Treasury yields weighed on technology stocks.
Record Orders and Robust Demand
Keysight's record order book was a standout metric, reflecting robust demand across its key end markets. The company's communications solutions segment generated $1.23 billion in revenue, up 35% year-over-year, driven by strength in commercial communications and aerospace, defense, and government customers. The electronic industrial solutions segment contributed $486 million, a 24% increase, with growth across automotive, energy, general electronics, and semiconductor markets.
CEO Satish Dhanasekaran described the quarter as the best in the company's history, citing a robust pipeline of opportunities. The company raised its fiscal 2026 outlook, projecting third-quarter revenue between $1.73 billion and $1.75 billion, with non-GAAP earnings per share expected in the range of $2.43 to $2.49. The midpoint of this guidance implies year-over-year revenue growth of approximately 29%.
Market Context and Analyst Sentiment
Keysight's after-hours surge stood out against a weak tape for the broader market. Tech stocks were under pressure as Treasury yields climbed, with portfolio strategist Garrett Melson of Natixis Investment Managers Solutions noting that rates were front and center for investors. Among peers, Agilent Technologies fell 1.4%, Viavi Solutions slipped 0.9%, while Teradyne managed a modest 0.1% gain.
Wall Street had been increasingly bullish on Keysight ahead of the report. On Monday, Susquehanna raised its price target to $415 from $300, maintaining a positive rating. Baird, Morgan Stanley, JPMorgan, and Goldman Sachs had all lifted their targets in recent weeks, reflecting optimism about the company's growth trajectory.
Financial Details and Risks
On a GAAP basis, Keysight reported net income of $349 million, or $2.02 per share, compared to $1.31 billion in revenue a year ago. Non-GAAP net income was $497 million, or $2.87 per share. The results included a $100 million tariff refund receivable and a $40 million liability for customer refunds. The company flagged inflation, high interest rates, export controls, tariffs, customer schedule changes, and order cancellations as potential risks to its outlook.
Investors are closely watching whether spending on AI networks, faster data infrastructure, and defense technology will sustain demand following the stock's significant run-up. Keysight's tools are critical for design, emulation, and testing in communications, semiconductors, aerospace, defense, automotive, and electronics sectors.
The full market reaction will be seen when regular trading opens Wednesday, as the report was released after the New York Stock Exchange closed at 4 p.m. Eastern.
