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What Keysight Technologies (KEYS) New Test Platforms Mean For Shareholders

Simply Wall St · 2d ago
  • Keysight Technologies recently announced new 1.6T Ethernet and high density FITS-16CH interconnect test platforms and disclosed that Korea Testing Laboratory selected its NR-NTN RF and RRM solutions for advanced satellite communications testing.
  • These launches and the KTL win highlight how Keysight Technologies is embedding its test platforms directly into AI data center build outs and next generation satellite validation workflows, tying its equipment demand to long term infrastructure projects rather than one off hardware cycles.
  • We will now look at how Keysight Technologies' investment narrative could be influenced by deeper AI data center testing adoption.
Pursue where the next AI data center test leaders might come from by scanning our hand-picked 55 AI infrastructure stocks.

Keysight Technologies Investment Narrative Recap

To own Keysight Technologies, you need to believe its test and measurement franchise can keep shifting toward higher margin software, simulation and services while participating in long lived AI data center, communications and defense programs. The main near term swing factor is execution on that mix shift and integration of Spirent in order to meet the cost synergy and margin goals that management has laid out.

The largest risk right now sits on two fronts: persistent supply constraints that keep about US$100m of orders sitting in backlog beyond the usual cycle, and the possibility that investors reassess a rich P/E if those operational targets slip. The latest AI data center and satellite test wins support the long term story but do not fundamentally change those near term tensions.

The most relevant recent data point is Keysight Technologies launching its SERT 1600GE and AresONE Plus 1600GE platforms for 1.6T Ethernet testing in AI data centers. That sits directly in the path of current catalysts, which rely on continued AI infrastructure build outs and higher speed interconnect validation to support future revenue and earnings power.

What matters for you is how effectively Keysight turns that hardware into a broader, recurring platform. The AresONE Plus connection with AI Data Center Builder software, protocol testing and realistic workload emulation speaks directly to the thesis that software, simulation and services can rise from roughly one third of revenue and support margins near the upper 60s gross range, while also deepening Keysight’s role in customer workflows.

How AI Data Center Testing Feeds Into Keysight Technologies' Consensus Story

Keysight Technologies' push into AI data center testing plugs directly into what analysts are already modeling for the business. The current consensus assumes revenue expands by 16.5% per year over the next three years and that higher margin software and services gradually lift profitability.

On the earnings side, the group of forecasters cited in the Simply Wall St report expects profit to reach US$2.8b by about 2029. That compares with earnings today of US$1.3b. It implies an increase of about US$1.5b in absolute terms as AI centric workloads, high speed Ethernet testing and satellite validation all deepen Keysight's role in customer labs and data halls.

Those same projections assume profit margins move from 19.4% today to 26.4% in three years. A higher mix from software, simulation and recurring services, including AI data center builder tools and protocol validation suites, is central to that shift. Integration of Spirent and related assets is another piece because it ties network testing traffic generators and emulation engines into Keysight's broader platforms.

The forecasts also bake in modest capital returns. Analysts expect the share count to decline by around 0.92% per year over the next three years as Keysight continues repurchases. Fewer shares mean any earnings growth tied to AI infrastructure and 1.6T Ethernet projects has a larger impact on earnings per share than on total profit alone.

Valuation work then links these operating assumptions to a 2029 snapshot. To line up with the consensus view, you would be working off revenue of US$10.4b and earnings of US$2.8b in that year, and a P/E multiple of 32.3x on those future earnings. That compares with a P/E of 51.2x on today's results and sits above the 30.1x multiple cited for the broader US Electronic sector.

Keysight Technologies' narrative projects US$10.4b revenue and US$2.8b earnings by 2029. This rests on 16.5% yearly revenue growth and an earnings increase of about US$1.5b from US$1.3b today.

Analysts then discount those out year numbers back to today. Using an 8.95% to 9.0% discount rate, they land on a consensus price target of US$415.08 per share, with the most optimistic call at US$452.00 and the lowest at US$350.00. With the stock around US$384.64 as of late October 2026, that central target sits about 7.3% above the current quote, which suggests the average analyst sees Keysight as roughly fairly valued rather than deeply mispriced.

The key link for you is simple. If you think AI data center test adoption, 1.6T Ethernet demand and satellite communications work will support something close to US$10.4b of revenue and US$2.8b of profit by 2029, then you are broadly aligned with the consensus case embedded in those targets. If your expectations differ, either on growth, margins or the right future P/E, your own sense of value for Keysight Technologies will likely sit at a different level.

Uncover how Keysight Technologies' fair value indicates a 27% potential upside to its current price, which could narrow quickly if sentiment shifts.

NYSE:KEYS 1-Year Stock Price Chart
NYSE:KEYS 1-Year Stock Price Chart

Exploring Other Perspectives

One alternate view puts far more weight on AI data center demand for Keysight Technologies. The most optimistic analysts were already modeling revenue of about US$11.1b and earnings of roughly US$3.0b by 2029 before these 1.6T Ethernet and NR NTN wins. Opinions clearly vary, so it helps to compare several narratives before deciding how this fresh news might reshape expectations.

Explore 2 other Keysight Technologies fair value estimates, including one that suggests as much as 28% upside from the current price.

Decide For Yourself

Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd. Consider your own analysis and instincts.

Looking For More Investment Ideas Beyond Keysight Technologies?

If the Keysight Technologies story has sharpened your thinking about AI infrastructure and testing, it can help to widen the lens. Use the Simply Wall St Screener to spot other companies that match the sort of balance sheet strength, income potential or valuation setup you want in your portfolio.