By Nate Wolf

The divergence between a weak automobile market and surging data-center demand could send semiconductor stocks in opposite directions the rest of the year, according to Mizuho Securities.

The firm upgraded Texas Instruments stock to Neutral from Underperform and lifted its price target to $215 from $160 in a research note Friday. Artificial intelligence has boosted the demand for power chips at data centers, which has stabilized the stock after a rough 2025.

Texas Instruments shares were up 1.4% to $226.23 on Friday. The stock fell 7.5% last year but has gained 29% in 2026 after offering a strong fiscal first-quarter outlook in January.

The company, which reports those first-quarter results next Tuesday, is getting a lift from new Nvidia graphics processing units and custom servers at data centers. The latest AI infrastructure requires analog power chips.

The AI data-center market was around 10% of Texas Instruments' revenue in 2025. Mizuho sees this figure potentially doubling by 2028 or 2029. Pair that with a recovery in industrial end markets like medicine, robotics, and power, and you get a stock that can at least hold its recent gains.

NXP Semiconductors, on the other hand, may be in trouble. Mizuho gave a rare double downgrade to the stock, cutting it to Underperform from Outperform and slashing its price target to $188 from $225. The company's exposure to the auto industry puts it at a disadvantage, Mizuho argued.

NXP stock was flat at $213.73 on Friday. It has declined 1.5% in 2026 as of Thursday's close of trading. Barron's has reached out to the company for comment.

The chip maker is a major player in auto semiconductors, deriving around 55% to 60% of its revenue from the auto end market. That number is about 33% for Texas Instruments.

But the auto market has been soft in 2026, with Mizuho projecting global light-vehicle production will decline around 2% year over year. Geopolitical and macroeconomic headwinds, as well as elevated car inventory, could point to an even greater decline, the firm said.

History isn't on NXP's side. The company got a bump from the car-buying boom of 2021 and 2022, but its auto revenue underperformed overall light-vehicle production in the years after as customers sat on swollen inventories.

Write to Nate Wolf at nate.wolf@barrons.com

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April 17, 2026 08:08 ET (12:08 GMT)

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