Advantest Foresees Record Profits Fueled by AI Semiconductor Boom
Tokyo, Tuesday, 29 July 2025.
Advantest anticipates a significant surge in financial performance. The company projects a 37% increase in net profit, reaching 221.5 billion yen for the fiscal year ending in March 2026. This substantial growth is attributed to escalating demand for its testing equipment. This equipment is essential for generative artificial intelligence semiconductors. The company’s sales are expected to reach 835 billion yen. The company’s operating profit should rise to 300 billion yen. This surge marks the second consecutive year of record-breaking financial results.
Market impact and analyst perspective
Despite the positive forecast, Advantest’s stock experienced a significant downturn. On July 28, Advantest shares plummeted by 8.96%, making it the largest drag on the Nikkei index [4]. This decline occurred amidst a broader market retreat, where the Nikkei 225 fell by 1.1% as investors took profits following a recent rally [4]. Seiichi Suzuki, a chief equity market analyst at Tokai Tokyo Intelligence Laboratory, noted that investors were selling shares to secure profits from the recent rebound, expressing concern that corporate earnings might not sustain current stock price levels [4].
Revised financial outlook
Advantest’s upgraded forecast includes upward revisions from previous estimates. Sales are now projected to increase by 7% to 835 billion yen, a revision up from an earlier forecast by 80 billion yen [1]. The operating profit is expected to rise by 31% to 300 billion yen, a significant 58 billion yen increase from prior estimates [1]. The company’s net profit forecast has been raised by 42.5 billion yen from previous projections [1]. This reflects confidence in sustained demand for AI-related semiconductor testing equipment.
Broader market trends and downgrades
The broader Tokyo stock market experienced a downturn, with the Nikkei average falling for the third consecutive day [2]. The market closed at 40,674.55, down 323.72 yen or 0.79% [2]. This decline was attributed to profit-taking, particularly in high-priced stocks such as SoftBank Group and Tokyo Electron [2]. Amidst these market dynamics, Advantest also faced a downgrade from EMEA-based analysts, who shifted their recommendation to the middle of a three-tier scale, though the target price was raised from 6,400 yen to 9,000 yen [6].
Factors influencing market sentiment
Several factors contributed to the cautious market sentiment. Investors were closely monitoring ongoing US-China trade discussions and awaiting key events such as the Federal Open Market Committee (FOMC) meeting and the Bank of Japan’s financial policy decision [2]. The Nikkei had risen by over 4% the previous week, approaching its highest level since July 2024, leading to increased sensitivity to profit-taking [2]. This confluence of events created an environment conducive to selling, impacting Advantest’s stock despite its positive forecast [2].