Texas Instruments stock soars on Q1 earnings as AI demand jumps

Texas Appliances It had its best day on Wall Street since 2000 after the chipmaker reported better-than-expected quarterly results and offered optimistic guidance amid high demand for its analog chips, which are vital to AI data center builds.

Shares of Texas Instruments closed at a record high, up 19% on Thursday. They are up 63% over the year.

Texas Instruments in the first quarter reported According to LSEG, revenue growth increased 19% to $4.83 billion, beating the average analyst estimate of $4.53 billion. Earnings per share were also above estimates at $1.68, while analysts predicted average earnings per share of $1.27.

Texas Instruments said revenue in the second quarter will be between $5 billion and $5.4 billion, representing 17% growth at the midpoint. The company said EPS will be between $1.77 and $2.05.

Revenue in the company’s data center segment was up nearly 90% from a year ago, CEO Haviv Ilan said in an earnings call late Wednesday. Industrial unit increased by 30%.

With hyperscalers like Meta And Amazon Texas Instruments, which is building data centers at a dizzying pace, is a big beneficiary.

“We are ready,” Ilan said. “If the market wants to grow at the same rate in the first quarter, we talked about 19 percent on an annual basis, we are ready. If it wants to accelerate, we are also ready.”

Although Texas Instruments does not produce the most advanced processors like Nvidia’s Advanced Micro DevicesAnalog chips perform basic tasks like regulating power and converting signals from the real world into data needed for other chips to run more complex tasks.

Apple is among its biggest customers. Apple CEO Tim Cook decided last year that Texas Instruments would produce “critical essential semiconductors” for iPhones and other devices at its new chip manufacturing facilities in Utah and Texas.

Other major customers include Nvidia, Ford, Medtronic and Elon Musk’s SpaceX.

Texas Instruments is spending $60 billion to build three new facilities in the United States. It also produces chips in Germany, Japan and China.

In February, the company agreed to acquire chip design firm Silicon Laboratories for $7.5 billion, expanding its ability to produce wireless and connectivity chips for industrial and consumer applications.

Ilan also addressed concerns about memory shortages and said there was no evidence that this would negatively impact the company’s personal electronics segment in future quarters.

“Customers are very aware of this, but I think they are preparing themselves well,” he said.

WRISTWATCH: First look at Texas Instruments’ $60 billion US megaproject where Apple will produce iPhone chips