• Texas Instruments recently reported its second quarter 2025 results, including sales of US$4.45 billion and net income of US$1.30 billion, and provided third quarter earnings guidance projecting revenues between US$4.45 billion and US$4.80 billion with earnings per share expected in the range of US$1.36 to US$1.60.
• Investor concerns were heightened following a cautious management tone during the earnings call, particularly regarding risks affecting the automotive sector such as tariffs, despite affirmed dividends and some analyst upgrades.
• We will now examine how Texas Instruments' more reserved outlook, especially on auto sector headwinds, could influence its investment narrative going forward.

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Texas Instruments Investment Narrative Recap

To own Texas Instruments, you need to believe in its enduring strength in analog and embedded chips, as well as its ability to weather sector cycles and seize long-term industrial and automotive growth. However, the recent management caution around auto sector tariffs and muted guidance has cast doubts on the near-term rebound, and these risks appear meaningful for now to both the most important catalyst, auto and industrial recovery, and overall sentiment.

Of the recent announcements, the new third quarter guidance stands out as most consequential. The lower midpoint of anticipated revenues and earnings per share relative to analyst expectations highlights current uncertainty, especially as it follows shortly after the second quarter’s sales growth but more subdued management tone. This directly informs the critical short-term question on whether demand recovery in TI’s core end markets is gaining enough traction to offset macro and trade headwinds.

In contrast, what often goes underappreciated is how shifting global tariffs and trade policy can introduce persistent volatility into TI’s sales and profit margins, something investors should be alert to, especially as...

Read the full narrative on Texas Instruments (it's free!)

Texas Instruments is forecast to generate $21.6 billion in revenue and $7.5 billion in earnings by 2028. This outlook is based on analysts expecting a 10.4% annual revenue growth rate and an increase in earnings of $2.7 billion from the current $4.8 billion.

Uncover how Texas Instruments' forecasts yield a $197.15 fair value, a 4% upside to its current price.

Exploring Other Perspectives

Some of the most optimistic analysts previously forecast Texas Instruments posting annual revenues of around US$26,600,000,000 by 2028 and significantly higher margins. If you think this news fundamentally challenges or supports those bold expectations, it’s worth comparing both sides before deciding where you stand.

Explore 5 other fair value estimates on Texas Instruments - why the stock might be worth as much as $197.15!

Build Your Own Texas Instruments Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Texas Instruments research is our analysis highlighting 1 key reward and 2 important warning signs that could impact your investment decision.
• Our free Texas Instruments research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Texas Instruments' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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