Texas Instruments beats Q2 estimates as data center revenue doubles

Texas Instruments Inc. reported second-quarter earnings that topped Wall Street estimates, driven by surging demand from data center, industrial and automotive customers that pushed revenue up 23 percent from a year earlier.

"The results validate our strategy of investing in manufacturing capacity ahead of demand," Chief Executive Officer Haviv Ilan said in a statement. "We see particular strength in data center, where revenue is on track to double this year."

The Dallas-based chipmaker posted earnings per share of $2.14 for the quarter ended June 30, beating the Zacks Consensus Estimate of $1.91 by 12 percent. Revenue reached $5.46 billion, exceeding the $5.22 billion consensus and climbing from $4.45 billion a year ago. Net income came in at $2 billion, while gross profit margin held at 61 percent. Sequentially, revenue rose 13 percent.

The strong results from Texas Instruments, the world's largest maker of analog chips, signal sustained demand across the semiconductor industry's key end markets. The company's data center segment is emerging as a major growth engine alongside its traditional industrial and automotive businesses. Shares slipped about 3 percent in premarket trading on Thursday despite the beat, with the stock up roughly 68 percent year to date — far outpacing the S&P 500's 9.7 percent gain. J.P. Morgan raised its price target to $340 for December 2027, citing cyclical momentum and data center growth.

The earnings beat and data center trajectory suggest management expects demand to accelerate through the second half of the year. Investors will watch the Q3 earnings call for updated segment margins and guidance on capital spending.

This article is for informational purposes only and does not constitute investment advice.