Texas Instruments shareholders are hoping for a record quarter when the chip maker reports earnings after the closing bell Wednesday. The rest of the market will focus on the growth of its relatively small data-center business.

Texas Instruments is navigating an upswing in the highly cyclical industrial semiconductor industry, which bottomed out in 2024. With the stock having jumped 68% to $291.30 this year, investors have found ample evidence that the current cycle is just getting started.

A still-slow market for automotive chips could limit headline growth in the second quarter. But another big quarter for data-center sales -- mainly power-management chips -- could be a positive sign for both Texas Instruments and the broader artificial-intelligence ecosystem.

Analysts expect Texas Instruments to report adjusted earnings of $1.94 a share for the June quarter, up from $1.41 a year ago, per FactSet. Revenue is expected to jump 18% to $5.3 billion, which would mark a quarterly record for the company.

The high expectations reflect rising demand for power-management semiconductors and analog chips that process sound, light, and temperature. Couple that with a pullback in capital expenditures signaled last quarter, and Texas Instruments is positioned to hike prices and boost profits.

"TXN is nearing the end of its multi-year investment cycle, reducing a meaningful burden on [profit and loss]," wrote BofA Securities analyst Vivek Arya in a research note last week.

Analysts estimate the company's operating margin will expand to 40.5% from 37.5% last quarter and 35.1% last year.

As the first major chip maker to report earnings, Texas Instruments' commentary on data-center demand could have consequences for chip makers with much deeper exposure to AI.

The company doesn't separate its data-center revenue, but CEO Haviv Ilan reported 90% year-over-year growth in the segment in the first quarter. UBS analyst Timothy Arcuri expects Texas Instruments to match or even exceed that figure on Wednesday.

The chip maker remains the 11th largest holding in the iShares Semiconductor exchange-traded fund, which has dominated investors' attention in 2026. That ETF and Texas Instruments stock have moved in lockstep this year.

Even if the AI commentary is positive, a slow recovery in Texas Instruments' automotive chip business, which accounted for about a third of total revenue in 2025, may prevent a truly blockbuster quarter.

Wall Street expects roughly 10% year-over-year growth -- an acceleration from last quarter but slow relative to industrial and AI-related sales. Auto demand has tended to lag broader chip demand in previous semiconductor cycles, Arcuri said.

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

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July 22, 2026 02:15 ET (06:15 GMT)

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