Investors were pleased to see the Nasdaq Composite (^IXIC 1.11%) finally appear ready to mount a sizable comeback on Wednesday morning. As of 8:15 a.m. ET, Nasdaq futures were up more than 2%.
A lot of that upward move came on the heels of upbeat guidance from software giant Microsoft, whose shares initially fell after its quarterly report but then bounced back following its conference call later Tuesday evening. However, beyond Microsoft, Texas Instruments (TXN 2.35%) also rose on favorable results. Moreover, the exchange company that runs the Nasdaq Stock Market, Nasdaq, Inc. (NDAQ 1.41%), also reported its latest earnings results. Below, you'll learn more about both stocks and why they're on the move higher Wednesday.
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Texas Instruments keeps chipping away
Shares of Texas Instruments were up nearly 5% in premarket trading on Wednesday. The semiconductor chip maker announced strong fourth-quarter financial results that showed just how strong the chip industry is right now.
TI's numbers were impressive. Revenue jumped 19% year over year to $4.83 billion. Strong gains in operating margin led to an even stronger 38% rise in operating profits, and that helped translate into a 27% rise in net income from year-ago levels. Earnings of $2.27 per share were 26% higher than in the prior year's fourth quarter and exceeded investors' expectations substantially.
Texas Instruments has also been a cash cow during the chip shortage. Free cash flow during the quarter came in at $1.075 billion, bringing the total number over the past 12 months to $6.3 billion. Of that amount, TI has returned $4.4 billion to shareholders, largely through dividends but also putting more than $525 million to work through stock buybacks in the past year.
Between its analog products and its embedded processing segment, Texas Instruments looks poised to keep pushing ahead in 2022. With no immediate end to favorable conditions for the industry in sight, shareholders are happy to let TI run.
A win for the Nasdaq
Meanwhile, shares of Nasdaq, Inc. moved up about 1% after having risen as much as 2% earlier in the premarket session. The exchange company's results gave a new perspective on the market's fluctuations lately.
Fourth-quarter results were solid. Revenue moved higher by 12% to $885 million. Adjusted earnings came in at $1.93 per share, up 21% year over year.
Nasdaq's full-year performance was also strong. Total revenue gained 18% to $3.42 billion, led by the company's solutions segment. Adjusted earnings of $7.56 per share rose 22% from 2020's levels. Nasdaq reported that it is now getting $1.87 billion in annualized recurring revenue, accenting the company's attempt to emphasize the financial technology attributes of its business.
Nasdaq marked a number of milestones for the year. The company led U.S. exchanges in terms of initial public offerings (IPOs) during 2021, featuring nine of the 10 largest U.S-based IPOs as ranked by amount of capital raised. More than 1,000 new companies listed their shares on the Nasdaq during the past year. Moreover, Nasdaq led exchanges in U.S. options trading.
The financial exchange industry has changed a lot in recent years, with the rise of cryptocurrency and other alternative assets gaining traction and demanding appropriate responses from Nasdaq and its rivals. So far, Nasdaq has navigated choppy waters well, and it will need to keep up its efforts in order to come through stronger than ever.
