Stress testing is a method used to evaluate the stability and performance of a system under extreme conditions. It involves simulating high-stress scenarios to determine how well the system can handle unexpected challenges, such as increased demand or failures. This process is commonly applied in fields like finance, where institutions like banks assess their ability to withstand economic downturns. In software development, stress testing helps identify potential weaknesses in applications by pushing them beyond normal operational limits. By observing how the system behaves under pressure, developers can make necessary adjustments to improve reliability and ensure a better user experience during peak usage times.