Texas Instruments Inc. guided for first-quarter earnings and revenue above Wall Street’s expectations today.

The forecast signals reinvigorated demand for its analog processors following a prolonged market slump, and its sent its stock higher in late trading.

The forecast was so positive that investors were willing to overlook disappointing fourth-quarter results, with the chipmaker missing estimates on both major metrics. The company reported earnings before certain costs such as stock compensation of $1.27 per share, trailing the Street’s $1.29 per share forecast, while revenue fell 7%, to $4.42 billion, below the $4.44 billion analyst target.

Still, TI’s prospects are looking much brighter going forward. Executives said the company is forecasting earnings for the current quarter of between $1.22 and $1.48 per share, with the midpoint of that range well ahead of the Street’s consensus estimate of $1.26. It’s also looking for sales of between $4.32 billion and $4.68 billion versus the Street’s guidance of $4.42 billion.

The chipmaker’s stock gained more than 9% in extended trading, buoyed by comments from its Chief Executive Haviv Ilan (pictured), who told analysts on a conference call that orders have been strengthening throughout the fourth quarter. That suggests customers have finally worked their way through a backlog of inventory and are ready to start making purchases again, he added.

TI is primarily focused on manufacturing older analog chips, which are the basic building blocks of almost every industrial and consumer electronics product. Whereas more advanced chips are designed to process complex data, analog chips perform various functions, such as converting signals from the real world into those understood by computers and power management systems. The chips are found in everything from calculators and smartphones to automobiles and data center servers.

In recent weeks, analysts have highlighted growing signs of demand recovery in the industrial markets where TI’s chips are primarily used. Earlier this month, BNP Paribas analysts said a restocking cycle is underway in industrial semiconductors and that it’s expected to drive growth in the analog chip segment.

Ilan acknowledged that the company has seen improvement in the industrial market, but erred on the side of caution, saying it might be a while before it returns to previous growth levels. “The market has been jittery, and so we’ll just have to see how it plays out,” he told analysts.

Investors are mostly been optimistic, though. After declining 7% in 2025, TI’s stock has gained more than 13% so far this year, following a long slump stemming from a supply glut that dates back to the days of the coronavirus pandemic.

Holger Mueller of Constellation Research said  investors have been waiting a long time for Texas Instruments to demonstrate it has a solid growth plan again. “Revenue is up, profit is stable and earnings-per-share is up for the year,” the analyst said. “Of course, the company has been helped by the dissipation of the inventory glut that has held it back lately, and the growing appetite for analog chips bodes well for the new fiscal year. For the management, now is the time to execute, and design wins, cloud revenue and supply chain mastery will be the things for investors to watch.”

The company is the second major chipmaker to report in the current earnings season, following Intel Corp. Whereas TI’s fortunes look to be improving, Intel’s latest forecast fell short of analyst’s expectations, sending its stock lower.

Photo: Texas Instruments