What Happened?
Shares of analog chip manufacturer Texas Instruments (NASDAQ: TXN) jumped 9% in the afternoon session after the company's optimistic forecast for the upcoming quarter overshadowed its mixed fourth-quarter financial results.
For the fourth quarter, the analog chipmaker reported revenue of $4.42 billion and earnings per share (EPS) of $1.27, falling slightly short of Wall Street's consensus estimates on both metrics. However, investors focused on the positive outlook. The company guided for first-quarter revenue of $4.5 billion at the midpoint, which was above analyst expectations. Similarly, its EPS guidance of $1.35 also came in ahead of forecasts. This stronger-than-expected guidance suggested a potential improvement in demand, leading investors to bid up the stock despite the recent underperformance.
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What Is The Market 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 22 days ago when the stock gained 8% on the news that a broader market rally drove investor optimism in artificial intelligence and big tech stocks.
The S&P 500, Dow Jones, and Nasdaq all pushed higher, approaching record levels set late last year. Much of the positive momentum was linked to the technology sector, with a particular focus on companies advancing artificial intelligence, a key theme at the annual CES trade show in Las Vegas. This continued a powerful trend from 2025, when AI-related developments were a primary catalyst for the market's bull run. The upbeat sentiment was further supported by hopes for easier monetary policy from the Federal Reserve following a weaker-than-expected US Services PMI reading.
Texas Instruments is up 21% since the beginning of the year, and at $214.76 per share, it is trading close to its 52-week high of $221.25 from July 2025. Investors who bought $1,000 worth of Texas Instruments’s shares 5 years ago would now be looking at an investment worth $1,269.
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