Why Is Keysight (KEYS) Stock Rallying? Record Q1 Results

Keysight Technologies (NYSE: KEYS) is surging on Tuesday after the electronic design and test solutions company delivered a standout fiscal first-quarter 2026 earnings report that beat Wall Street expectations on both the top and bottom lines. The strong results were fueled by accelerating demand across AI infrastructure, aerospace and defense, and next-generation connectivity markets.

Management followed up the beat with forward guidance that significantly exceeded analyst estimates, sending shares soaring more than 20% in intraday trading. The reaction underscores growing investor confidence that Keysight is emerging as a key beneficiary of the AI investment supercycle.

Record Q1 Results Powered by AI and Defense Demand

Keysight reported Q1 FY2026 revenue of $1.6 billion and adjusted EPS of $2.17, surpassing the consensus estimate of $2.00. Orders grew 22% year-over-year on an organic basis, and the company ended the quarter with a backlog of $2.75 billion, providing strong visibility into the remainder of the fiscal year.

Morningstar noted that management nearly doubled its fiscal 2026 organic growth guidance, with total reported growth now expected to exceed 20%, including roughly 7% from acquisitions.

J.P. Morgan maintained its Overweight rating and raised its price target to $300 from $255, citing the convergence of several secular tailwinds driving a growth acceleration that could eclipse even the early 5G wireless cycle.

The bank’s analysts pointed to strong orders in AI-specific use cases, spanning optical and electrical equipment and rack emulation, combining with upsides in wireless, aerospace and defense, and semiconductor test demand. Morgan Stanley also raised its target to $268 from $227, calling the quarter “much stronger than expected” as AI and aerospace and defense activity saw a meaningful pickup.

Join our Telegram group and never miss a breaking digital asset story.

KEYS Stock Brief: Shares Hit 52-Week High

As of 10:31 AM EST on Tuesday, February 24, 2026, KEYS was trading at $298.19, up approximately 21.71% on the session, after opening at $277.72 following a previous close of $245.00. The stock touched an intraday high of $301.45, a new 52-week high, on volume well above its daily average of 1.16 million shares.

The company’s market capitalization stood at approximately $50.8 billion intraday, with a trailing P/E ratio of 58.90 reflecting the premium investors are placing on its accelerating growth outlook.

From a broader performance standpoint, KEYS has been a standout outperformer, up roughly 45.5% year-to-date compared to the S&P 500’s gain of just 0.28% over the same period, and up more than 70% over the trailing year. Multiple brokerages moved quickly to raise price targets following the results, including J.P. Morgan, Morgan Stanley, Wells Fargo, and Barclays.

With the average analyst price target of $226.46 now sitting well below where shares are trading, further upward revisions appear likely as analysts update their models to reflect the company’s upgraded guidance.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.