Texas Instruments surges after snapping multiyear streak of falling sales
CEO Haviv Ilan called a decisive bottom in the semiconductor cycle and said demand is trending “up and to the right.”
For anyone who has a stake in the global semiconductor cycle — and if you own any broad US stock ETF, that means you! — the quarterly commentary of Texas Instruments CEO Haviv Ilan has been a useful lens into tracking demand for the components that seemingly go into everything we use.
Shares of the chipmaker are up nearly double digits in premarket trading after its Q1 results impressed, with earnings per share of $1.28 trouncing estimates of $1.07 and revenues of nearly $4.1 billion also ahead of projections.
The company snapped a nine-quarter streak of falling revenues with double-digit growth, while its guidance for the current quarter was also higher than what the Street had penciled in for its top and bottom lines. And the encouraging remarks from Ilan, especially compared to previous quarters, really drill home this positive inflection.
During Texas Instruments’ Q4 earnings call, he suggested that industrial chip demand was “hovering at the bottom, maybe found a bottom” — remarks echoing what he said three months ago. A long time spent around the trough? That pointed to an ugly, L-shaped recovery in ex-AI chip demand, which is to say, not much of a recovery to speak of. (Texas Instruments’ sales are more concentrated to industrial and automotive segments than computer electronics, without much of a footprint in AI to speak of, either.)
He’s singing a more optimistic, decisive tune this time. “The cycle has hit the bottom because we are seeing more and more evidence from customers that they are really, really short on inventory,” he said. “You can kind of say that the markets are now pointing, pre the trade challenges, all up and to the right.”
“Based on what we’ve seen in Q1, I think this is a real recovery,” he added, rather than pulled-forward demand from customers fearing higher prices due to tariffs in the future, while cautioning that it’s difficult to pin down buyers’ motivations in the second quarter.
