Texas Instruments Plunges 11.53% on Cautious Guidance

On July 23, 2025, Texas Instruments experienced a significant drop of 11.53% in pre-market trading, reflecting investor concerns over the company's second-quarter earnings report and cautious guidance for the third quarter.

Texas Instruments reported second-quarter revenue of $4.45 billion, slightly above analyst expectations, with operating profit at $1.56 billion, also exceeding forecasts. However, the company's guidance for the third quarter fell short of market expectations. Texas Instruments projected third-quarter revenue between $4.45 billion and $4.80 billion, with earnings per share ranging from $1.36 to $1.60, both below analyst estimates.

The company's cautious outlook is attributed to the uncertainty surrounding the impact of tariff policies on chip demand. While Texas Instruments saw a surge in orders at the beginning of the second quarter due to tariff-related stockpiling, the order levels returned to normal by the end of the quarter. The company's management expressed confidence in their strategic direction but acknowledged the challenges posed by the current economic environment.

Despite the setback, Texas Instruments remains optimistic about the long-term demand for its products, particularly in the industrial and automotive sectors. The company's extensive product portfolio and broad customer base make it a key indicator of global semiconductor demand. Texas Instruments is investing heavily in expanding its production capacity and integrating generative AI into its offerings to enhance its competitive position.