Tech & AI
Texas Instruments beats forecasts as data-centre chip sales nearly double and guides fourth-quarter revenue above estimates
The analog chipmaker's third-quarter revenue rose 28% to $6.06 billion, with industrial demand up more than 40% and data-centre sales up about 95%.
HedgeWeekly Tech & AI Desk ·
Texas Instruments reported third-quarter revenue of $6.06 billion on October 21, up 28% from a year earlier and 11% from the second quarter. Net income rose 78% to $2.43 billion, or $2.62 a share, against $1.48 a year ago. Analysts had expected revenue of about $5.92 billion and earnings of about $2.41 a share, according to consensus figures cited by Benzinga. The company makes analog chips, which manage power and convert real-world signals such as temperature and sound into data, and embedded processors, the small chips that control devices.
Analog revenue climbed 32% to $4.91 billion and embedded processing grew 21% to $858 million. On the earnings call, management said industrial sales rose more than 40% from a year earlier, automotive grew in the mid-teens and data-centre sales rose about 95%, while personal electronics were roughly flat. Over the past 12 months, free cash flow reached $8.42 billion, or 40.6% of revenue, compared with 14.0% a year earlier.
For the fourth quarter, TI guided revenue of $5.8 billion to $6.3 billion and earnings of $2.45 to $2.79 a share, both above analyst estimates of $5.73 billion and $2.29. Management said pricing, mostly negotiated once a year, edged up in the second half of 2026 after being flat in the first half, and that talks on 2027 prices have begun. It expects 2026 capital spending of $2 billion to $3 billion, likely towards the top of that range if tool deliveries arrive on time. The shares closed 2.5% higher at $284.65 in regular trading before the release and were little changed after hours.
Why it matters: TI sells into almost every corner of the economy, so a broad pickup in industrial and automotive orders points to a cyclical recovery in older-generation chips, not just AI accelerators. The near-doubling of data-centre sales shows AI spending is now feeding power-management and signal chips as well as graphics processors. Investors will watch whether customers are building inventory, how 2027 price talks land and how the planned Silicon Labs acquisition reshapes the embedded business.