April 22 (Reuters) – Texas Instruments forecast second-quarter revenue and profit above Wall Street expectations on Wednesday, anticipating a boost in demand for its analog chips amid the data center boom, sending its shares up over 10% in extended trading.
Texas Instruments makes analog chips, which perform a range of functions, including regulating power systems and converting signals such as sound, temperature or light into digital data that can be processed by other semiconductors.
Tech firms have been spending aggressively to bolster their AI ambitions by constructing massive data center projects and buying large quantities of chips to run such infrastructure.
The data center segment grew around 90% from the same period last year, TI’s CEO Haviv Ilan said on the post-earnings call.
Demand in industrial and auto end markets has also been recovering as customers resume placing orders after clearing out excess inventory they stored during the pandemic.
This, along with AI-driven demand, has boosted TI’s shares by over 35% to near-record highs this year.
TI, being one of the first chip companies to report March quarter earnings, is closely watched as its widespread chip use serves as a demand indicator for various industries.
“We believe industrial is particularly strong with lean inventories and improving sell-through. Automotive is also likely starting a new up-cycle,” Stifel analyst Tore Svanberg said.
Executives said they expect continued growth in the automotive market, which increased mid-single digits during the quarter, after the sector has grappled with tariff and cost pressures.
The company expects second-quarter revenue of between $5 billion and $5.40 billion, compared with estimates of $4.86 billion, according to data compiled by LSEG.
It anticipates earnings per share of between $1.77 and $2.05, compared with estimates of $1.57 per share.
Revenue for the first quarter was $4.83 billion, beating estimates of $4.53 billion.
(Reporting by Zaheer Kachwala in Bengaluru; Editing by Vijay Kishore)
