Why Did TXN Stock Jump Over 11% Overnight?

• TXN’s revenue in the first quarter grew 19%, also ahead of expectations.
• The chipmaker highlighted industrial and data center consumer segments as driving growth.
• Stocktwits sentiment for TXN climbed higher in the ‘extremely bullish’ zone.

Texas Instruments shares gained over 11% in the overnight trading session heading into Thursday, after the chipmaker forecast quarterly revenue and profit above market expectations.

If the gains hold in the regular session, it would be the stock’s best day in over a year and set a new record. The results are the first from a chip company this season: Intel will report in post-market hours on Thursday, and others like Qualcomm and Advanced Micro Devices will report in the coming weeks. 

TXN’s Quarterly Performance, Q2 Forecast  

Texas Instruments expects second-quarter revenue between $5 billion and $5.4 billion and earnings per share between $1.77 and $2.05. Analysts polled by FactSet were expecting revenue of $4.86 billion and earnings of $1.57 a share.

In the first quarter, revenue increased 19% to $4.83 billion, exceeding expectations of $4.53 billion. Profit rose 31% to $1.55 billion. The company highlighted the industrial and data center segments as driving growth. 

Texas Instruments makes analog chips and embedded processors, the kinds that connect the physical markets like sound, temperature, power, motion and so on to digital systems. 

Its chips are widely used in industrial equipment, automobiles, consumer electronics, and communications gear for tasks like power management, signal processing, and control. 

Retail’s View On TXN

On Stocktwits, the retail sentiment for TXN has climbed higher over the week and was ‘extremely bullish’ in early Thursday hours. Traders were upbeat about the stock’s prospects, although some discussed potential profit-taking in the coming days.

“$TXN nice move…but I predict some profit taking tomorrow and Friday,” said a trader.

“No doubt profit takes will be around and Friday is traditionally a sell off. But, as an investor, I know this ticker pays good dividends and will always hit a new all time high,” another trader said.

“We might even be looking at a first time ever stock split in the near future. But regardless, this is a great investment in a company with ground breaking advancements over the years.”

TXN stock is up 38% year to date, riding a broader chip-stock rally, with momentum picking up sharply in recent weeks.

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