Keysight Shares Face Headwinds from Major Investor Sell-Off

Keysight US49338L1035

Despite posting strong quarterly results and authorizing a substantial share repurchase initiative, Keysight Technologies is encountering significant selling pressure from institutional shareholders. This activity from major funds is weighing on market sentiment toward the precision measurement equipment specialist.

The company's operational fundamentals present a contrasting picture to the recent trading activity. For its fourth fiscal quarter, Keysight reported revenue of $1.42 billion, marking a 10.1% year-over-year increase. Earnings per share came in at $1.91, surpassing analyst consensus estimates by eight cents and showing clear improvement over the $1.65 EPS recorded in the prior-year period.

Demonstrating confidence in its financial position and future, the board of directors has approved a new $1.5 billion stock buyback program. This authorization, decided on November 24, represents nearly 5% of the company's outstanding shares. Management intends to execute the repurchases on the open market, a move that could help offset the downward pressure from institutional sales.

Significant Institutional Sales Drive Technical Pressure

The actions of large investors are creating a notable overhang. Swedbank AB significantly reduced its stake, selling 871,922 shares—a cut of 21.9%. Following this transaction, the Swedish bank retains a holding of approximately 3.1 million shares, equating to 1.81% of the company's capital. Confluence Investment Management also divested, selling over 6,400 shares.

These transactions carry substantial weight because institutional investors collectively control more than 85% of Keysight's outstanding equity. Consequently, coordinated selling within this group can exert considerable technical pressure on the share price.

Internal Transactions and Forward Guidance

Activity was also noted among corporate insiders. Both the Chief Executive Officer and a Senior Vice President executed share sales in December. The Vice President's transaction involved 15,000 shares, reducing his direct holdings by more than 41%.

Looking ahead, management provided guidance for the first quarter of fiscal 2026, forecasting earnings per share in the range of $1.95 to $2.01. The company continues to identify artificial intelligence and advanced semiconductor testing as its primary growth engines. With an operating cash flow of $1.41 billion generated in the last fiscal year, Keysight possesses ample liquidity to fund both its share repurchase program and strategic acquisitions, such as its pending purchase of Spirent Communications.