Chip rally trips as Texas Instruments and STMicro face tougher crowd
Strong analog-chip earnings were not enough for investors as capex worries hit Texas Instruments and STMicro warned on personal electronics.
By Frankie Delgado · News Reporter
3 min read
Texas Instruments and STMicroelectronics both brought solid numbers to Wall Street on Thursday. Investors still reached for the sell button.
Shares of Texas Instruments were down 5% in premarket trading after the company beat profit and revenue expectations and gave a third-quarter outlook that, at the midpoint, topped analyst forecasts. STMicroelectronics fared worse, with its U.S.-listed shares falling 14% in premarket trading after its own better-than-expected quarter came with a softer signal for personal electronics.
The moves landed in a hot corner of the chip business. Analog semiconductors are used in sensors, power management and amplification, making them key parts for data centers and industrial equipment.
Both companies pointed to brisk data-center demand. MarketWatch reported that STMicro lifted its 2027 data-center forecast for the second time since June. Both companies also reported automotive growth in the mid-teens percentage range and industrial sales gains of at least 30%.
Texas Instruments beats, then spooks investors on spending
Texas Instruments said adjusted earnings per share rose 52% to $2.14. That was above the $1.94 consensus estimate tracked by FactSet, even after a 5-cent-per-share tax provision.
Revenue climbed 23% to $5.46 billion, also ahead of FactSet’s $5.26 billion analyst forecast.
The company’s third-quarter targets for sales and profit, using the midpoint of guidance, were also above Wall Street expectations. The catch came from spending.
Chief Financial Officer Rafael Lizardi told analysts that capital expenditure could land near the upper end of the company’s prior $2 billion to $3 billion range, according to MarketWatch.
Cantor analyst Matthew Prisco said in a note cited by MarketWatch that investors had built up high expectations before the report. He said the company’s roughly seasonal quarter-to-quarter guidance, when set against pricing, data-center and cyclical support, helped explain the after-hours pressure. Prisco also said the capex comment weighed on hopes for an improvement in cash flow.
STMicro’s results clear the bar, but guidance bites
STMicroelectronics, based in Geneva, also topped analyst estimates. The company said adjusted earnings more than doubled to 31 cents a share, while revenue rose 26% to $3.49 billion.
Analysts surveyed by FactSet had expected adjusted earnings of 28 cents a share on $3.47 billion in sales.
The pressure point was the company’s view of the next quarter. STMicro said its personal electronics business is expected to show weaker-than-usual seasonal performance in the third quarter.
The company also said fourth-quarter revenue will be above $4 billion, with AI data centers and low-Earth-orbit satellite communications doing much of the lifting.
UBS analyst Francois-Xavier Bouvignies said in a note cited by MarketWatch that STMicro’s shares had risen 35% over the prior three months. He said the absence of a bigger upgrade was likely to weigh on the stock compared with the broader market.
The message from investors was sharp: even strong chip demand may not be enough when expectations have already raced ahead.
This story draws on original reporting from MarketWatch.