Keysight Technologies (NYSE: KEYS) stock hit an all-time high Tuesday morning after the test and measurement company delivered a standout Q1 FY2026 report. Shares were trading at $301, up roughly 27% over the past week and 47% year-to-date. Ahead of the report, investors were watching whether Keysight could clear the high bar set by its own guidance and accelerating order momentum. It cleared it convincingly.
The Numbers That Drove the Move
Keysight reported adjusted EPS of $2.17, beating the consensus estimate of approximately $1.98 by roughly 9.6%. That is the largest EPS beat in at least eight quarters. Revenue came in at $1.60 billion, topping the $1.54 billion consensus and representing 24% year-over-year growth. For context, the company’s own guidance heading into the quarter called for revenue of $1.53 billion to $1.55 billion and non-GAAP EPS of $1.95 to $2.01. Keysight beat the top end of both ranges. The year-over-year EPS comparison is particularly striking: $2.17 this quarter versus $1.82 in Q1 FY2025, a period when the company significantly missed estimates.
Growth was broad-based, with double-digit gains across all business segments. AI data center infrastructure spending was cited as a primary demand driver, alongside continued strength in aerospace, defense, and government markets.
Guidance Steals the Show
The forward outlook may be what pushed the stock to all-time highs. Q2 FY2026 guidance calls for revenue of $1.69 billion to $1.71 billion and adjusted EPS of $2.27 to $2.33. At the midpoint, that implies roughly 30% year-over-year revenue growth and sequential EPS expansion from an already strong Q1 print. Multiple sources described the outlook as significantly above analyst expectations. Management attributed the performance to strategic investments made over the prior three years, with AI infrastructure demand now translating directly into order momentum.
Market Reaction and Valuation Context
The stock surged roughly 14% to 15% in after-hours trading following the report. At the current price of $300, Keysight carries a forward P/E of approximately 22x, a meaningful compression from the trailing multiple of 49x, reflecting how sharply earnings have accelerated. The prior analyst consensus price target of $226 is now well below where the stock trades, meaning a wave of upward revisions is likely today.
What to Watch Next
Analyst price target revisions will be the immediate catalyst to track. Longer term, the key question is whether AI infrastructure spending sustains the demand curve Keysight is riding. The Q2 guidance suggests management sees no near-term slowdown, but investors will want confirmation as the quarter progresses.
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