DALLAS, Jan 28, 2026, 07:16 CST
- Texas Instruments forecast first-quarter revenue and profit above estimates, lifting shares in U.S. premarket trade.
- CEO Haviv Ilan said data-center revenue rose 70% in the December quarter and TI will start breaking out that business.
- Analysts warned heavy capital spending and soft personal-electronics demand could still drag on the recovery.
Texas Instruments shares rose about 7% in premarket trading on Wednesday after the chipmaker issued a first-quarter outlook that pointed to stronger demand tied to AI data centers. Reuters
The forecast matters because it hints the AI buildout is pulling in less glamorous chips, not just the top-end processors made by companies like Nvidia. TI sells analog chips — the power-control and signal-conversion parts that sit around the “brains” of a data center and keep systems stable.
It also lands as investors look for signs the long inventory hangover in the analog market is easing. MarketWatch said TI’s outlook implies sequential revenue growth from the fourth quarter into the first quarter, a pattern the company has not forecast in about 16 years.
TI expects first-quarter revenue of $4.32 billion to $4.68 billion, versus a $4.42 billion analyst estimate compiled by LSEG, and earnings of $1.22 to $1.48 per share. The company’s shares had jumped nearly 9% in extended trading late Tuesday before Wednesday’s premarket move, and Reuters noted the stock trades at a higher forward price-to-earnings multiple than rival Analog Devices.
Chief executive Haviv Ilan said TI will begin breaking out data-center sales as a separate end market, underscoring how fast that demand is rising. Data-center revenue grew 70% in the December quarter and made up 9% of TI’s total sales in 2025, he said on a post-earnings call. Reuters
Some of the lift is not just AI. Summit Insights analyst Kinngai Chan said an industrial recovery also helped drive the stronger outlook, and Stifel analyst Tore Svanberg said the “inventory correction that has plagued the industry during the last two years” looks essentially complete, positioning TI for faster growth into 2026.
TI reported fourth-quarter revenue of $4.42 billion, net income of $1.16 billion and earnings per share of $1.27, the company said. It noted the quarter’s EPS included a 6-cent reduction that was not in its original guidance. Texas Instruments
Ilan said revenue fell 7% from the prior quarter but rose 10% from a year earlier. Over the trailing 12 months, TI posted $7.2 billion in cash flow from operations and $2.9 billion in free cash flow — a non-GAAP measure it defines as operating cash flow minus capital spending, plus proceeds from U.S. CHIPS and Science Act incentives.
That cash comes with a price tag. TI said it invested $4.6 billion in capital expenditures over the past 12 months and returned $6.5 billion to shareholders through dividends and buybacks, while continuing a manufacturing push built around 300-millimeter wafers — larger silicon discs that can lower per-chip costs.
But the upside case is not clean. Analysts flagged the risk that years of heavy factory spending could keep return on equity under pressure, and Reuters cited concerns about weak personal-electronics demand as a global memory-chip shortage weighs on smartphones and PCs. Trade friction and tariffs remain another wild card for a company that has been expanding U.S.-focused production.
MarketWatch highlighted the split in analyst reaction. Cantor Fitzgerald analyst Matthew Prisco called the outlook “surprisingly positive” and pointed to a potential $9 billion to $10 billion in free cash flow next year, while Jefferies analyst Blayne Curtis said the broader analog recovery is “stuck in first gear,” with the real gains coming from TI’s data-center exposure. Bernstein analyst Stacy Rasgon also tempered expectations, even as he noted benefits from lower capital spending. MarketWatch
TI’s stock fell 7.5% in 2025, but Reuters said it is up more than 13% so far in 2026 as investors bet the analog downcycle is ending. The next test is whether growth holds beyond one quarter — Ilan has said the company needs another consecutive quarter of growth before it can “gain confidence” in how durable the upturn is.
