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From classroom calc icon to AI sidekick
Texas Instruments spent years wearing the “boring but dependable” label like an old varsity jacket. Then Thursday happened: the stock ripped 19.4% after Q1 results and Q2 guidance came in way hotter than expected. For a company most people still associate with TI-83 graphing calculators, that’s a pretty spicy plot twist.
The real story: chips behind the chips
TXN doesn’t make the flashy AI accelerators. That’s NVIDIA’s gym. What Texas Instruments does make is the less glamorous stuff that keeps the whole data center machine from melting down — power conversion, signal-chain silicon, the plumbing of modern tech.
And that business is suddenly getting louder:
- Data center revenue grew about 90% year over year in Q1
- It rose more than 25% sequentially
- Management said data center is now 11% of the business
That’s the kind of mix shift investors love, because it says the growth story isn’t just “industrial is eventually recovering.” It’s “oh, wait, AI is here too.”
The numbers that got Wall Street sprinting
The quarter itself was a clean beat, but the guidance is what really lit the fuse. TXN said Q2 revenue should land between $5 billion and $5.4 billion, with the midpoint roughly $350 million above expectations. EPS guidance of $1.77 to $2.05 also cleared consensus by a wide margin.
The cash flow angle mattered too. Free cash flow jumped to $1.4 billion in the quarter, helped by $555 million in CHIPS Act funding tied to its Sherman, Texas fab. On a trailing 12-month basis, free cash flow reached $4.4 billion versus $1.7 billion a year ago. Translation: the company is coming out of a heavy investment phase and starting to look much more like a cash machine again.
Why investors should care
Analysts immediately piled in with higher targets, and that usually means the market is rethinking the whole setup. If industrial demand keeps healing and data center growth keeps accelerating, Texas Instruments may no longer be just the old-school chip name you only remember when your teacher said, “Take out your calculator.”
Big picture: when a 95-year-old chipmaker turns into an AI beneficiary, the market pays attention — because sometimes the best “new” AI story is hiding inside a very old one.