Hey everyone, Hirokichi here. This week’s Weekly Stock Picks features one stock from Japan and one from the U.S. This time it’s Advantest (6857), which just posted a blowout quarter on AI chip testing demand, and Target (TGT), the U.S. retailer whose turnaround under a new CEO is starting to show up in the numbers. Both names moved sharply on recent news, so let’s dig in.
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Advantest (6857) hits a record quarter on AI chip testing demand, but the stock is swinging hard
First up from Japan: Advantest (6857), the world’s largest maker of semiconductor testers, the equipment used to check whether chips work properly after they are manufactured. The company is said to hold roughly 60-70% of the global market for testers used with HBM (high bandwidth memory), the stacked memory chips widely used in generative AI hardware.
The stock came into focus after its Q1 FY2027 (April-June 2026) earnings, released July 29. Revenue rose 39.3% year over year to ¥367.5 billion, operating profit jumped 53.3% to ¥190.0 billion, and net profit surged 93.8% to ¥174.8 billion, all quarterly records. The driver is AI chip production ramping up, with demand for testing AI inference chips in particular running ahead of the company’s own April forecast. Management also raised its full-year guidance, now projecting FY2027 operating profit up 69% year over year to ¥846.0 billion. Shares jumped as much as roughly 16% intraday the following trading day, July 30.
That said, the stock has also been volatile in the other direction. After bottoming at ¥19,720 on March 31, shares rallied to an all-time high of ¥35,940 on June 25. But on August 18, profit-taking hit AI and chip-related names broadly, and Advantest fell 5.08% to ¥35,860, the same day the Nikkei 225 dropped 1,759 points after five straight days of gains. As a bellwether AI stock, it seems to swing hard in both directions: sharply up on good earnings, sharply down when investors decide to lock in gains.
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An investor’s-eye view of Advantest
On the positive side, Advantest is riding a genuine structural tailwind in AI chip demand, and its results keep setting new quarterly records. The global semiconductor tester market itself is expected to hit an all-time high in calendar 2026, driven by rising AI chip production volumes and growing chip complexity, so the tailwind looks likely to continue for now.
On the caution side, the stock price has already run up well ahead of earnings growth, which makes it prone to sharp swings on any change in earnings or the broader market mood. Double-digit percentage drops from the all-time high have happened within days, so investors should be prepared for the kind of volatility that comes with a high-priced, AI-themed growth stock.
Target (TGT) jumps 4% on an earnings beat as the new CEO’s turnaround gains traction
Now for the U.S. pick. Target (TGT), the big-box discount retailer, beat expectations with its Q2 FY2026 earnings on August 19, and the stock rose 4% that day to a new 52-week high. Earnings per share (EPS, meaning profit per share) came in at $2.46, ahead of the $2.25 consensus estimate. Comparable store sales rose 2.7% (versus 2.5% expected), digital comparable sales grew 8.7%, and same-day delivery usage jumped 25%. Both physical stores and e-commerce were strong, and the grocery business posted its fastest growth in three years.
Target has been working through a turnaround under CEO Michael Fiddelke, who took the top job in February 2026. The company has committed an incremental $1 billion to store remodels, merchandising, and staff training, and this quarter’s results are the first clear sign that the plan is starting to pay off. Management also raised its full-year net sales growth outlook by one percentage point, to roughly 5%. With this earnings beat, Target shares are now up 58.5% year to date in 2026, comfortably outpacing the broader S&P 500.
An investor’s-eye view of Target
The upside here is that the turnaround plan is finally showing up in the numbers, with improvement across stores, digital, and groceries all at once. A wave of analysts raised their price targets after the report (for example, Goldman Sachs moved its target from $127 to $161, and UBS moved from $166 to $185), which suggests sentiment on Wall Street is improving too.
The caution is that, even though this quarter was genuinely strong, the stock has already climbed nearly 60% this year, so a lot of the good news may already be priced in. In fact, the average analyst rating is still “Hold,” and the consensus price target of roughly $160.68 implies only about 1% of further upside from current levels. The stock actually dipped briefly right after the earnings release before recovering, a reminder that a good quarter and a quarter good enough to justify an already-elevated stock price are not always the same thing.
What this week’s picks tell me
What stands out to me about both of these stocks is: (1) the earnings themselves were genuinely strong, no argument there; (2) even so, the stock reaction was not straightforward in either case; and (3) underneath both stories is the same question, how much good news was already priced in before the results came out. A bellwether AI name like Advantest tends to swing hard in both directions, and even a steady turnaround story like Target starts facing pressure for “more” once the stock has already run up. As an individual investor, I think it’s worth watching not just whether the earnings were good, but how much optimism the stock price is already carrying into the report.
Last week’s Weekly Stock Picks covered Disco and Nebius ([Weekly Stock Picks] Disco (6146) Hits Record Quarterly Profit on AI Demand but Slides on Chip Sector Selloff, U.S. Nebius (NBIS) Soars on Earnings), a similar theme of sharp swings in AI-related names, so it’s worth a look if this one interested you.
Let’s keep at it, slow and steady. See you next time!
日本語版はこちら → 【今週の注目株】アドバンテストはAI半導体テスタ特需で四半期最高益も株価乱高下、米ターゲットは決算で株価4%高・年初来58%高！日米2銘柄を深掘り
* This article is for informational purposes only and does not recommend any specific investment. Please make investment decisions at your own responsibility.
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