Texas Instruments Plunges 11.69% on Cautious Q3 Outlook

On July 23, 2025, Texas Instruments experienced a significant drop of 11.69% in pre-market trading, reflecting investor concerns over the company's third-quarter outlook and the impact of tariff uncertainties on demand.

Texas Instruments reported strong second-quarter earnings, with revenue and earnings per share (EPS) exceeding market expectations. However, the company's guidance for the third quarter was less optimistic, with an EPS forecast of $1.48, below analyst expectations of $1.50. The company also highlighted the potential impact of tariff uncertainties on customer demand, particularly in the automotive sector, which is showing signs of a slow recovery.

The company's core business, particularly its analog chip segment, which serves the automotive and industrial markets, showed robust growth. However, the third-quarter revenue forecast of $44.5 billion to $48 billion, with a midpoint of $46.25 billion, was only slightly above the expected $45.9 billion. This cautious outlook, combined with the potential for higher tax rates and increased production costs, has raised concerns about the company's profitability.

Texas Instruments is investing heavily in expanding its manufacturing capabilities in Texas and Utah, focusing on 300mm wafer manufacturing technology. While this investment is expected to enhance long-term cost control, it also represents a significant short-term financial burden. The company's management remains confident in its strategic direction, emphasizing that opportunities outweigh challenges.