Shares of Texas Instruments (TXN +9.94%) ended Wednesday's trading 9.9% above Tuesday's closing price. The semiconductor veteran reported Q4 2025 results on Tuesday evening, offering an unusual mix of hits and misses.
NASDAQ: TXN
Key Data Points
A mixed earnings report with a silver lining
Let's start with the usual headline figures. TI's revenue rose 10% year over year to $4.42 billion. The analyst consensus called for $4.45 billion, so it was a slight miss. Unadjusted earnings fell 2%, landing at $1.27 per diluted share. Here, Wall Street was looking for $1.29 per share. The bottom line included unexpected charges of $0.06 per share related to goodwill impairment and tax items. Without these one-time items, TI's earnings result would have been more than enough.
So TI fell short of the usual market-moving targets. But investors were quick to brush off these minor disappointments to focus on several positive surprises instead.
- Guidance for the next quarter was consistently above the current Street projections.
- A new chip-making facility in Sherman, Texas, is ramping up production ahead of schedule. Among other items, this factory produces voltage regulators for high-powered computers, ultimately serving the lucrative data center market. That's an ideal segment for beating forecasts.
- Data center orders rose by a staggering 70% year over year. That wasn't even a reporting segment last year. Still, the data center business is now large enough to deserve its own year-end commentary with detailed financials delivered on the earnings call.
Image source: Getty Images.
Made in America, sold to data centers
TI sees manufacturing as a competitive advantage.
Its in-house chip-making assets allow the company to churn out generous product volumes at a time when third-party manufacturing giants led by Taiwan Semiconductor (TSM +1.17%) and Samsung (SSNL.F +56.02%) are booked solid with artificial intelligence (AI) accelerator and memory-chip orders. And TI's top factories operate in Texas and Utah, not Taiwan and China. As a result, management didn't even mention tariffs in the earnings call.
The Q4 numbers were technically a miss, but the market clearly cared more about where TI is headed than where it just was. That's a vote of confidence in the company's data center pivot and in-house manufacturing strategy.
