DALLAS, Jan 28, 2026, 07:16 CST
- Texas Instruments forecasted first-quarter revenue and profits that surpassed analyst expectations, driving its shares higher in U.S. premarket trading.
- CEO Haviv Ilan announced a 70% surge in data-center revenue for the December quarter, with TI set to report that segment separately going forward.
- Analysts warned that heavy capital spending combined with sluggish demand for personal electronics could keep the recovery under pressure.
Texas Instruments shares surged about 7% in premarket trading Wednesday after the chipmaker’s first-quarter forecast pointed to strong demand fueled by AI data centers. 1
This forecast matters because it shows AI growth depends on more than just high-end processors from companies like Nvidia. TI supplies analog chips—those crucial power-management and signal-conversion parts that support the “brains” of a data center, keeping systems stable.
Investors are closely monitoring whether the long-standing inventory surplus in the analog sector is starting to clear. MarketWatch reports that TI’s forecast points to sequential revenue growth from Q4 to Q1—a pattern the company hasn’t anticipated in about 16 years.
TI projects first-quarter revenue to land between $4.32 billion and $4.68 billion, edging past analysts’ $4.42 billion estimate, per LSEG data. Earnings per share are forecasted at $1.22 to $1.48. The stock jumped almost 9% in after-hours trading Tuesday, ahead of Wednesday’s premarket, with Reuters noting its forward P/E ratio now surpasses that of rival Analog Devices.
TI’s CEO Haviv Ilan revealed the company will begin breaking out data-center sales in its reports, spotlighting the sector’s fast expansion. Data-center revenue surged 70% in the December quarter and is expected to make up 9% of TI’s total sales by 2025, he said on a post-earnings call. 2
Not all the lift is from AI alone. Summit Insights analyst Kinngai Chan highlighted an industrial rebound as a major driver behind the improved outlook. At the same time, Stifel analyst Tore Svanberg said the “inventory correction that has plagued the industry during the last two years” seems to be finished, positioning TI for faster growth through 2026.
Texas Instruments reported Q4 revenue of $4.42 billion, with net income hitting $1.16 billion and earnings per share coming in at $1.27. The EPS took a 6-cent hit that wasn’t accounted for in the original forecast. 3
Ilan noted that revenue slipped 7% from the prior quarter but rose 10% year-over-year. In the last 12 months, TI pulled in $7.2 billion in operating cash flow and $2.9 billion in free cash flow — the latter being a non-GAAP metric that subtracts capital expenditures from operating cash flow, then adds proceeds from the U.S. CHIPS and Science Act incentives.
TI isn’t holding back: it dropped $4.6 billion on capital expenditures over the past year and handed $6.5 billion back to shareholders through dividends and buybacks. At the same time, it’s boosting production with an emphasis on 300-millimeter wafers — larger silicon discs that lower the cost per chip.
But the upside carries its own challenges. Analysts caution that years of heavy spending on factories could keep weighing on return on equity. Reuters also flagged concerns about weak personal-electronics demand amid a global memory-chip shortage affecting smartphones and PCs. On top of that, trade tensions and tariffs complicate matters for a company expanding its U.S.-centered production.
MarketWatch highlighted a clear divide among analysts. Cantor Fitzgerald’s Matthew Prisco called the outlook “surprisingly positive,” projecting free cash flow between $9 billion and $10 billion next year. In contrast, Jefferies’ Blayne Curtis said the overall analog recovery is still “stuck in first gear,” with true momentum coming from TI’s data-center segment. Bernstein’s Stacy Rasgon took a more cautious stance, even while noting the advantages of lower capital spending. 4
TI’s stock took a 7.5% hit in 2025, but Reuters says it’s bounced back with more than a 13% gain so far in 2026, fueled by bets that the analog slump is ending. The big question now: will growth last beyond a single quarter? Ilan pointed out the company needs two quarters in a row of growth to “gain confidence” that the recovery will hold.
