Texas Instruments $TXN ( ▼ 0.98% ) shares surged after the chipmaker issued first-quarter guidance that topped expectations and struck a more upbeat tone about demand. Investors looked past a slightly soft fourth quarter and focused on signs that key end markets may be turning.
Guidance flips the script
Texas Instruments said it expects current-quarter revenue between $4.32 billion and $4.62 billion, with the midpoint above Wall Street forecasts. Earnings guidance of $1.22 to $1.48 per share also came in stronger than analysts expected, a welcome shift after several quarters where outlooks disappointed.
The company’s fourth-quarter results were mixed, with revenue and earnings coming in just below estimates. But management noted that earnings included a small hit not reflected in prior guidance, softening the blow.
Industrial demand is the key swing factor
CEO Haviv Ilan pointed to an ongoing recovery in industrial markets, which make up roughly one-third of Texas Instruments’ sales. He emphasized there is still “a lot of room to go” compared with prior peaks, suggesting the rebound may have more runway.
That message resonated after previous calls where management’s tone had been seen as cautious. This time, the stronger forecast and more confident commentary helped shift sentiment.
AI adds a growing tailwind
While industrial chips remain the core business, Texas Instruments is also seeing rising demand tied to AI infrastructure. Data center-related revenue is still a small slice of overall sales, but it grew rapidly last quarter, adding another growth lever.
For investors, the combination of an improving industrial cycle and steady AI exposure makes Texas Instruments $TXN ( ▼ 0.98% ) look better positioned heading into the year.