Texas Instruments Earnings Pass the Test -- Barrons.com

By Nate Wolf

Texas Instruments stock could use a jump-start after a slow few months. The company's third-quarter earnings report Wednesday wasn't an immediate boost, but it could set the chip maker up well for the rest of the year.

Texas Instruments breezed past earnings expectations for the latest period and, more importantly, guided for an excellent fourth quarter. Wall Street had feared the fourth-quarter guidance may be a bit light for a stock trading at a premium to its peers.

The stock slipped 0.5% to $283.10 in after-hours trading.

Shares had surged some 94% over the first half of year as the market for analog semiconductors -- basically any chip that doesn't run artificial-intelligence workloads -- showed signs of life. Things have settled down since: The stock is down 14% since its all-time high notched in June.

Wednesday's earnings print demonstrated that the fundamentals that drove the stock higher remain in place.

Texas Instruments reported earnings of $2.62 a share in the third quarter, up from $1.48 a year ago and ahead of analysts' consensus estimate of $2.44, per FactSet. Revenue jumped 28% year over year to $6.06 billion, surpassing Wall Street's call for $5.94 billion. The company highlighted growth across its industrial, automotive, and data center end markets.

Fourth-quarter guidance was similarly strong. Texas Instruments expects revenue of $5.8 billion to $6.3 billion in the last three months of the year, compared with the $5.76 billion expected by analysts. It is targeting earnings per share of $2.45 to $2.79, well ahead of Wall Street's consensus of $2.31.

"It's not a blowout quarter," said Chandler Willison, a research analyst at M Science. But the earnings report does show "competent, continued execution."

The real question is how to value Texas Instruments moving forward. Shares traded at a high of 40 times projected 12-month earnings in June -- their priciest valuation in over a decade -- and still trade at a relatively high 28 times. Strong guidance for the fourth quarter and beyond will help the chip maker justify that valuation.

It likely didn't help Texas Instruments that shares of Lam Research, which makes chip manufacturing equipment and is a proxy for semiconductor demand, fell 5.1% after its own earnings report on Wednesday afternoon.

Lam reported a modest earnings beat for the September quarter, but its guidance for the current quarter was only in line with expectations.

Write to Nate Wolf at nate.wolf@barrons.com

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October 21, 2026 17:19 ET (21:19 GMT)