Texas Instruments guides Q4 above consensus on AI data center demand

Texas Instruments reported third-quarter results after the close on October 21, 2026, with revenue up 28% from a year ago and operating profit up 73%. The fourth-quarter guidance range of $5.80 billion to $6.30 billion in revenue and $2.45 to $2.79 in EPS compares with analyst expectations of $5.75 billion and $2.27, putting even the low end above consensus. The shares closed at $284.65, up 2.47%, and traded at $288.10 after hours, a modest move for a stock already up 66.84% in 2026.

Most of the growth comes from the cyclical recovery in industrial and automotive, not from AI data centers. Industrial revenue rose more than 40% year over year, and automotive grew in the mid-teens. CEO Haviv Ilan noted that industrial set a new peak after four years, and that automotive customers show no inventory build-up. Analog revenue rose 32% to $4.91 billion, while Embedded Processing rose 21% to $858 million.

Valuation remains the central issue: at a $259.96 billion market value, the stock trades at 37 times trailing earnings and 28 times forward earnings, a premium to a typical cyclical chipmaker. CFO Julie Knecht reported inventory of $4.7 billion, or 194 days of supply, which allows quick shipping but would tie up cash if demand stalls. The guide's wide ranges mean the low ends matter more than the midpoints, and the recovery story would weaken considerably if fourth-quarter revenue falls below $5.80 billion or if the January outlook shows 2027 pricing slipping.