What Happened?
Shares of analog chip manufacturer Texas Instruments (NASDAQ: TXN) jumped 9.8% in the pre-market session after the company reported strong first-quarter 2025 results, which significantly exceeded analysts' EPS expectations and included next quarter's revenue guidance that topped Wall Street's estimates. What stood out was the 11% jump in revenue from the prior year, supported by broad-based growth across nearly all business segments, except for a typical seasonal dip in personal electronics. Zooming out, we think this quarter featured some important positives.
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What The Market Is Telling Us
Texas Instruments’s shares are somewhat volatile and have had 13 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 13 days ago when the stock dropped 8.3% after China Semiconductor Industry Association issued an emergency directive detailing new methods for verifying the origin of imported chips. According to reports, the location of the wafer fabrication plant would define the origin of imports when tariffs are applied. This meant that companies with manufacturing facilities in the US might be severely affected by the escalating US-China trade tension.
Texas Instruments is down 13.4% since the beginning of the year, and at $161.90 per share, it is trading 26.5% below its 52-week high of $220.29 from November 2024. Investors who bought $1,000 worth of Texas Instruments’s shares 5 years ago would now be looking at an investment worth $1,421.
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