Keysight Technologies (KEYS): Valuation Check After Strong Earnings, AI Demand and Conviction List Upgrade

Keysight Technologies (KEYS) just delivered another solid earnings update, with orders, revenue, and earnings all moving higher as demand for AI infrastructure, next generation communications, and defense modernization continues to build.

See our latest analysis for Keysight Technologies.

The latest earnings beat and fresh $1.5 billion buyback have clearly resonated with investors, with a roughly 24 percent 3 month share price return helping push Keysight to about $206.61. This has reinforced a solid 5 year total shareholder return near 66 percent and suggests momentum is still building rather than fading.

If this kind of tech driven rerating has your attention, it is a good moment to explore other potential winners among high growth tech and AI stocks and see what else the market might be overlooking.

Yet with shares already near Wall Street targets after a powerful rerating, investors now face a tougher question: Is Keysight still mispriced given its AI and defense tailwinds, or is the market already discounting that future growth?

Most Popular Narrative: 3.2% Undervalued

With the narrative fair value sitting just above Keysight's last close, the story hinges on whether its growth engine can keep compounding from here.

Expansion of software and recurring service offerings, now comprising 36% and 28% of total revenue respectively, increases gross and net margins by enhancing revenue stability, improving product mix, and reducing cyclicality from traditional hardware segments.

Read the complete narrative.

Want to see the math behind this premium price tag? The narrative leans on stronger growth, fatter margins, and a future earnings multiple that assumes real staying power. Curious which projections carry the heaviest weight in that forecast? Dive in to unpack the assumptions driving this fair value call.

Result: Fair Value of $213.38 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, this upside depends on smooth execution, with tariff headwinds and a potential cooling of AI infrastructure spending both capable of derailing the growth path.

Find out about the key risks to this Keysight Technologies narrative.

Another Angle on Valuation

While the narrative model sees Keysight as modestly undervalued, its current price tells a different story. At a 40.7x earnings multiple versus a 23.5x sector average and a 27.8x fair ratio, investors are clearly paying up. This raises the question: how much good news is already in the price?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Keysight Technologies Narrative

If you are not fully convinced by this view, or would rather dig into the numbers yourself, you can build a custom narrative in just a few minutes, starting with Do it your way.

A great starting point for your Keysight Technologies research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.