"Texas Instruments (NASDAQ:TXN) shares surged 5% in after-hours trading yesterday following guidance that caught the market off guard, and continue up 7% in this morning's pre-market. The company projected first-quarter 2026 revenue of $4.32 billion to $4.68 billion, with a midpoint of $4.50 billion that exceeds both Wall Street's $4.42 billion consensus and the company's own fourth-quarter 2025 revenue of $4.42 billion."
"Management specifically cited "data centers and industrial recovery" as the drivers, signaling that customers have finally cleared inventory backlogs that plagued the semiconductor industry through 2023 and 2024. The AI Infrastructure Play Texas Instruments isn't building GPUs, but it's capturing a different piece of the AI buildout. Data centers need analog chips for power management, signal processing, and thermal control across every rack of servers. As hyperscalers expand capacity to support AI workloads, TI's analog portfolio becomes infrastructure."
Texas Instruments projected first-quarter 2026 revenue of $4.32 billion to $4.68 billion, with a midpoint of $4.50 billion that exceeds Wall Street's $4.42 billion consensus and the company's fourth-quarter 2025 revenue of $4.42 billion. Management cited "data centers and industrial recovery" as drivers, indicating customers have cleared inventory backlogs that affected the semiconductor industry through 2023 and 2024. Analog revenue grew 14% year-over-year in 2025, gross margins held at 57.4% in Q3, and operating margins stabilized at 35%, suggesting pricing power is returning. The company benefits from AI-driven data-center demand for analog chips and returns capital with a 2.8% dividend yield.
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