Texas Instruments' stock jumps 18%, heads for best day since 2000 as AI demand soars

Texas Instruments experienced a remarkable surge in its stock price, jumping 18%, marking its best performance on Wall Street since 2000. This surge followed the company’s announcement of quarterly results that exceeded expectations, largely fueled by heightened demand for its analog chips essential for AI data center development. On Thursday, Texas Instruments' shares reached a record high, with an impressive year-to-date gain of around 60%. The company reported a revenue increase of 19% in the first quarter, totaling $4.83 billion, surpassing the average analyst forecast of $4.53 billion, according to LSEG. Earnings per share (EPS) also outperformed estimates, coming in at $1.68 compared to the anticipated $1.27. Looking ahead, Texas Instruments projected second-quarter revenues between $5 billion and $5.4 billion, indicating a 17% growth at the midpoint. EPS is expected to range from $1.77 to $2.05. CEO Haviv Ilan highlighted that revenues in the data center sector soared by approximately 90% year-over-year, while the industrial segment saw a 30% increase. With major players like Meta and Amazon rapidly expanding their data center capacities, Texas Instruments stands to gain significantly. "We are prepared," Ilan stated confidently during the earnings call. "If the market continues to grow as it did in Q1, we are ready. If it accelerates, we are ready as well." Though Texas Instruments does not manufacture the most advanced processors like Nvidia or AMD, its analog chips play crucial roles in power regulation and signal conversion, laying the groundwork for other chips to perform complex tasks. The company counts Apple among its largest clients, with CEO Tim Cook having committed to producing vital semiconductors for iPhones and other devices at Texas Instruments’ new facilities in Utah and Texas. Additional key customers include Nvidia, Ford, Medtronic, and SpaceX. Texas Instruments is investing $60 billion to construct three new manufacturing plants in the U.S. and also operates facilities in Germany, Japan, and China. Earlier this year, the company acquired Silicon Laboratories for $7.5 billion, enhancing its capacity to produce wireless and connectivity chips for both industrial and consumer markets. Addressing concerns over a potential memory shortage, Ilan reassured investors that there is no indication it will adversely affect the personal electronics segment in upcoming quarters. "Customers are very aware of it, but I think they are doing well preparing themselves," he noted.