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Keysight Technologies (KEYS +18%) is surging after reporting its largest EPS beat in the past six quarters, driven by accelerating demand and standout upside guidance. The supplier of test & measurement equipment and design software delivered record Q1 (Jan) revenue and issued impressive Q2 (Apr) guidance that came in well above expectations.

• Q1 revenue jumped 23.3% yr/yr to a record $1.60 bln, exceeding estimates and marking a clear acceleration from Q4.
• The Communications Solutions Group (CSG) segment saw revenue climb 27% yr/yr to $1.12 bln, with orders growing even faster. Wireline delivered record orders, surpassing wireless for the first time, fueled by demand across compute, memory, interconnect and networking technologies.
• The Electronic Industrial Solutions Group (EISG) segment grew 15% yr/yr to $476 mln, with double-digit order and revenue growth across general electronics, semis and automotive & energy markets.
• KEYS issued substantial upside Q2 (Apr) guidance, well ahead of consensus, reflecting continued momentum across AI infrastructure, next-generation connectivity and semiconductor complexity trends. Keysight is benefiting from several powerful secular tailwinds. Hyperscalers are investing heavily in scale-up and scale-out architectures, increasing the need to validate performance across electrical, optical, RF and network protocol layers..

Briefing.com Analyst Insight:

Keysight's Q1 report underscores that it is a leveraged beneficiary of the AI infrastructure build-out, even if it operates behind the scenes. The record revenue, strong order growth and sizable Q2 upside guidance suggest demand remains robust across both communications and industrial end markets. The inflection in wireline orders, particularly tied to AI data center scaling and Ethernet-based networking, is especially notable. While expectations will now reset higher following the stock's recent move, the combination of accelerating growth and multiple secular drivers supports continued relative strength.

Finally, although KEYS is not typically viewed as a headline AI infrastructure play, its Q1 results and especially its Q2 guidance are likely to draw increased investor attention. After trading largely sideways from March to November 2025, the stock has gained significant momentum following strong reports in Q4 and now Q1.