Will Keysight's Collaboration With USMAG Alliance Benefit the Stock?

Keysight Technologies, Inc. KEYS recently announced it had joined the Intel Foundry Accelerator United States Military, Aerospace and Government (“USMAG”) Alliance to bolster the U.S. Defense Industrial Base and expand the availability of its advanced tools and technologies for matters that are deemed essential to national security.

KEYS’ Contribution to the Defense Sector

Keysight has been at the forefront of delivering tailored Electronic Design Automation (EDA) tools and cutting-edge test solutions to major defense contractors and the U.S. government for many years. These solutions include next-generation EDA software, which provides a comprehensive suite of advanced design and simulation tools that help engineers tackle complex challenges in RF, microwave and high-speed digital systems. 

In addition to the EDA software, Keysight's tools for the defense sector include manufacturing automation, radio frequency (RF) signal routing, conditioning software and intellectual property (IP) management solutions, as well as various test and measurement applications. Keysight RF Microwave Switch Matrix products provide automatic routing of RF microwave signals between test instrumentation and the unit under test, while the IP Management facilitates efficient IP management, reuse and traceability, enabling engineers to organize, catalog and track valuable IPs across design projects.

Does KEYS Stock Stand to Gain From the Collaboration?

Keysight is gaining from strong industry-wide growth. The company is witnessing solid adoption of its electronic design and test solutions. Its comprehensive suite of solutions is particularly valuable for microelectronics development, offering industry-leading expertise in RF and microwave design, which is critical for ensuring first-pass design success. By leveraging Keysight’s simulation, measurement, and IP management capabilities, engineers can seamlessly correlate results across the design, simulation and testing phases, reducing risks and improving overall efficiency. 

By joining the USMAG Alliance, Keysight is strengthening its commitment to providing top-tier technologies and solutions to U.S. defense and aerospace sectors. The alliance will provide members access to its cutting-edge process technology and a robust ecosystem of industry-leading partners, facilitating faster, more efficient development of secure, next-generation military and aerospace systems. 

These advancements are expected to generate incremental demand for Keysight’s solutions, leading to higher revenues. An improved financial performance is likely to propel the stock upward.

KEYS’ Stock Price Performance

Shares of Keysight have gained 12.3% over the past year compared with the industry’s growth of 10.4%.

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KEYS’ Zacks Rank and Key Picks

Keysight currently carries a Zacks Rank #3 (Hold). 

Some better-ranked stocks in the broader industry have been discussed below.

Ericsson ERIC carries a Zacks Rank of 2 (Buy) at present. In the last reported quarter, ERIC delivered an earnings surprise of 22.22%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Headquartered in Stockholm, Sweden, Ericsson is a leading provider of communication networks, telecom services and support solutions. The company is a leader in telecommunications and is now expanding its role into an ICT (Information and Communications Technology) solutions provider. 

InterDigital, Inc. IDCC sports a Zacks Rank of 1 at present. It has a long-term growth expectation of 17.44%

IDCC is a pioneer in advanced mobile technologies that enable wireless communications and capabilities. 

Ubiquiti Inc. UI sports a Zacks Rank #1 at present. In the last reported quarter, Ubiquiti delivered an earnings surprise of 20.9%. Its highly flexible global business model remains apt to adapt to changing market dynamics to overcome challenges while maximizing growth. 

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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