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Exclusive Story Keysight: The Quiet Winner in the AI and Defense Spending BoomBy Leo Miller. Publication Date: 3/18/2026. 
Key Points - Keysight Technologies has seen its share price run higher recently, with its last earnings report delivering the stock a big gain.
- The company is winning business from two of the world's most important industries: AI and defense.
- Even with improving fundamentals, the stock’s valuation leaves less room for execution missteps if growth moderates.
- Special Report: Elon's "Hidden" Company
Keysight Technologies (NYSE: KEYS) is a relatively under-the-radar technology stock benefiting from multiple converging tailwinds. The company is seeing rising demand from both artificial intelligence (AI) and defense markets—two of the hottest industries today. Shares have climbed more than 80% over the past 52 weeks, including a roughly 23% spike after its latest earnings report. So, what exactly does Keysight do, why has it delivered such strong performance, and is there still room for long-term gains? Let's dive in. Keysight: A Validation Engine Pushing Technology Forward I've worked for the CIA, personally met four US presidents, and spent 45 years studying the markets—calling Black Monday six weeks before it happened, predicting the fall of the Berlin Wall, and pinpointing the exact bottom in 2009. But what I'm about to share with you is the boldest prediction of my career. After meeting Elon Musk face-to-face at a private gathering of Wall Street elites and months of my own research, I'm now staking my reputation on one date: March 26, 2026. That's when I believe Elon will announce the SpaceX IPO—what Bloomberg is calling the biggest listing of all time. I have found an access code that lets you grab a pre-IPO stake before it happens, but in 72 hours, your window could close. Click here to see how to claim your SpaceX access code Keysight combines hardware, software, and services to help electronics companies design, validate, manufacture, deploy, and optimize products. The firm effectively offers a full-stack solution: from early research and prototype testing to product implementation and ongoing refinement. Keysight participates in the electronic design automation (EDA) software space alongside firms such as Synopsys (NASDAQ: SNPS) and Cadence Design Systems (NASDAQ: CDNS), but its revenue mix is much more hardware-heavy. In its latest earnings call, Keysight said software and services accounted for about 40% of revenue, with hardware making up most of the rest. That mix shows up in gross margins, which typically sit in the mid-60% range. While strong, those margins are below the +80% levels often seen at pure-software EDA peers such as Synopsys and Cadence, because software generally carries higher margins than hardware. One advantage of a hardware bias, however, is increased customer stickiness: Keysight's software gains value as it integrates with a broad installed base of hardware products, encouraging customers to use its full suite of solutions. These firms aren't direct, one-to-one competitors—there's overlap, but their offerings are largely complementary. Synopsys and Cadence emphasize virtual modeling of chips and systems before physical production. Keysight focuses on testing and validating how technologies actually perform under real-world physical conditions. For investors, the takeaway is that Keysight has carved out an important niche in electronic development: validating real-world performance across AI infrastructure, 5G/6G networking, defense, and automotive systems to ensure complex technologies work as intended after design. KEYS Beats Big, Ups Guidance as Big Tailwinds Drive Growth Keysight delivered a strong quarter, with revenues rising 23% year over year to $1.6 billion. That was the company's fastest revenue growth since 2021 and comfortably beat consensus estimates (around 19% growth). Adjusted earnings per share rose 19% to $2.17, well above estimates of $2.00. Guidance was the standout. Keysight now expects revenue and earnings to grow roughly 20% for the year, versus prior guidance that anticipated revenue growth near or above 7% (excluding acquisitions). The new guidance includes acquisitions but still represents a sizeable upgrade to core growth expectations. That beat-and-raise is what sent the stock higher after the report. The company said it is engaging with all hyperscalers as they rapidly scale AI infrastructure. As firms design and deploy AI networking solutions, Keysight is participating in end-to-end validation of these systems. Advances in networking technologies are also creating more testing opportunities. In Q4 2025, Keysight worked with Broadcom (NASDAQ: AVGO) to validate next-generation 1.6-terabit networking silicon and custom AI accelerators. In the final quarter of 2025, Keysight estimated that AI drove roughly 10% of revenue—meaning AI is a meaningful but still relatively small part of the business, with room to grow. The company also posted record revenue in its Aerospace, Defense, and Government end market, which rose 18%. Keysight is seeing demand from U.S. prime defense contractors and "robust, broad-based activity in Europe" amid rising European defense budgets. Importantly, overall orders grew about 30%, well ahead of revenue growth, signaling accelerating demand. For Q2 2026, Keysight is forecasting revenue growth of roughly 30%. KEYS: AI and Defense Enabler With Valuation Question Marks The MarketBeat consensus price target on Keysight sits near $295, implying only about 3% upside from current levels. Price targets moved up significantly after the earnings release; the average of updated targets is roughly $308, implying roughly 7% upside. Keysight has grown free cash flow at a compound annual rate near 18%, its highest level ever. The company's current valuation implies that level of growth must continue for multiple years to justify the stock price. Meeting that bar will be challenging, so the firm's elevated valuation introduces risk. That said, Keysight sits at the intersection of two powerful secular trends—AI and defense modernization—which could support further gains. Overall, Keysight is an intriguing name to watch and could present a more compelling opportunity if the share price retreats materially. | 
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