Keysight Technologies (KEYS) Stock Could Be 5.1% Undervalued After Q2 Earnings Beat

Keysight Technologies (KEYS) drew fresh investor attention after reporting Q2 fiscal 2026 results that beat earnings estimates, while revenue came in slightly below expectations amid demand in several end markets.

See our latest analysis for Keysight Technologies.

Keysight Technologies' recent Q2 release appears to have reinforced an already strong run, with a 30 day share price return of 7.74% and a 90 day share price return of 31.04% contributing to a 1 year total shareholder return of 128.21%. This suggests momentum has been building as investors react to earnings, the VPIphotonics acquisition, and new partnerships such as the Siemens collaboration.

If Keysight's momentum has you thinking about where else growth and AI infrastructure themes might show up next, it could be worth scanning 49 AI infrastructure stocks

After a run that has seen Keysight Technologies climb sharply over the past year and trade only modestly below analyst price targets, the key question now is whether there is still an investment opportunity here or if the market is already pricing in the next leg of growth.

Most Popular Narrative: 5.1% Undervalued

With Keysight Technologies last closing at $363.67 versus a narrative fair value of $383.08, the most followed view is that the stock still trades below its central estimate, anchored on AI driven demand, next generation wireless and a heavier software mix.

Adoption of AI across digital infrastructure is accelerating demand for advanced testing solutions in compute, memory, networking, and interconnect, with Keysight's AI focused investments leading to double digit wireline and commercial comms growth; this trend is expected to drive sustained top line revenue growth as AI workloads expand into new customer segments and applications over the coming years.

Read the complete narrative.

Curious what sits behind that fair value for Keysight Technologies? The narrative leans on a blend of steady top line expansion, rising margins and a richer mix of software and recurring revenue. Want to see how those assumptions translate into earnings power and the valuation multiple they are willing to pay?

Result: Fair Value of $383.08 (UNDERVALUED)

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

However, Keysight Technologies still faces meaningful risks, including higher tariff related costs and the possibility that AI infrastructure spending or order momentum cools faster than analysts currently assume.

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

Another View: What Multiples Say About Keysight Technologies

While the narrative fair value suggests Keysight Technologies is around 5.1% undervalued, the current P/E of 57.9x tells a different story. It sits well above the fair ratio of 36.8x, the US Electronic industry average of 32.9x, and the peer average of 52.2x, which points to elevated valuation risk if sentiment cools or growth expectations ease.

Given that gap, it is worth asking whether you see Keysight’s current pricing as justified by its earnings outlook, or as leaving little room for disappointment.See what the numbers say about this price — find out in our valuation breakdown.

Next Steps

If this mix of optimism and caution around Keysight Technologies feels familiar, take a moment to review the data yourself and decide how comfortable you are with the current risk and reward balance. Then check the 2 key rewards and 1 important warning sign

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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.

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