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wrote a column · Jan 28 10:59

Following storage, is the next leg of AI's rally 'analog and power'? Texas Instruments' earnings report provides the answer.

Author | Eric Texas Instruments isn't about GPUs, CPUs, or storage. It's not flashy. What it sells are those chips that quietly keep the world running: power management and signal conversion. These chips are found in factory equipment, car chassis, and now, they are increasingly flooding into new areas.AI Data Center。 This quarter, this once rather dull company has suddenly shown potential for a valuation re-rating, much like how the AI storage sector transformed commodity memory chips into core infrastructure. Key highlights from Texas Instruments' earnings report: Although the performance in the past quarter was lackluster, the guidance, which truly determines valuation, underwent significant changes: Guidance exceeded expectations, with Q1 showing no signs of a typical off-season. $Texas Instruments (TXN.US)$ The Q1 revenue guidance was set at $4.32 billion to $4.68 billion, with a midpoint of $4.5 billion, surpassing Wall Street analysts’ average estimate of $4.42 billion by $80 million. The midpoint EPS guidance of $1.35 also exceeded the expected $1.26 by $0.09. Data center demand is no longer just speculation. Texas Instruments' management revealed that Q4 data center revenueincreased by approximately 70% year-over-year, and this business has accounted for a portion of the total sales in 20259%. Most crucially, the managementannounced plans to separately disclose sales data for the data center business going forward,which means the 'AI narrative' is no longer an abstract concept. Recovery in the analog chip cycle Analog chips in ex...
Author | Eric
The story Texas Instruments tells isn't about GPUs, CPUs, or memory, and it's not flashy.
What they sell are the unsung chips that keep the world running: power management and signal conversion. These chips can be found in factory equipment, in car chassis, and now, they are increasingly flooding intoAI Data Center。
This quarter, the company, which was previously considered somewhat dull, suddenly showed potential for a valuation re-rating, much like how AI storage previously transformed commodity storage chips into core infrastructure.
Key highlights from Texas Instruments' earnings report:
Although the past quarter's performance was lackluster, the guidance that truly determines valuation has changed significantly:
Guidance beats expectations; Q1 off-season is not weak
$Texas Instruments (TXN.US)$ The Q1 revenue guidance provided ranges from $4.32 billion to $4.68 billion, with a midpoint of $4.5 billion, surpassing the Wall Street analysts’ average estimate of $4.42 billion by $80 million. The midpoint EPS guidance of $1.35 also exceeded the expected $1.26 by $0.09.
Author | Eric Texas Instruments isn't about GPUs, CPUs, or storage. It's not flashy. What it sells are those chips that quietly keep the world running: power management and signal conversion. These chips are found in factory equipment, car chassis, and now, they are increasingly flooding into new areas.AI Data Center。 This quarter, this once rather dull company has suddenly shown potential for a valuation re-rating, much like how the AI storage sector transformed commodity memory chips into core infrastructure. Key highlights from Texas Instruments' earnings report: Although the performance in the past quarter was lackluster, the guidance, which truly determines valuation, underwent significant changes: Guidance exceeded expectations, with Q1 showing no signs of a typical off-season. $Texas Instruments (TXN.US)$ The Q1 revenue guidance was set at $4.32 billion to $4.68 billion, with a midpoint of $4.5 billion, surpassing Wall Street analysts’ average estimate of $4.42 billion by $80 million. The midpoint EPS guidance of $1.35 also exceeded the expected $1.26 by $0.09. Data center demand is no longer just speculation. Texas Instruments' management revealed that Q4 data center revenueincreased by approximately 70% year-over-year, and this business has accounted for a portion of the total sales in 20259%. Most crucially, the managementannounced plans to separately disclose sales data for the data center business going forward,which means the 'AI narrative' is no longer an abstract concept. Recovery in the analog chip cycle Analog chips in ex...
Data center demand is no longer just a feeling
Texas Instruments management revealed that Q4 data center revenueincreased approximately 70% year-over-yearand this business now accounts for9%of total sales projected for 2025. Most importantly, managementAnnounced that sales data for the data center business will be disclosed separately in the future,This means that the 'AI narrative' is no longer a vague concept.
Author | Eric Texas Instruments isn't about GPUs, CPUs, or storage. It's not flashy. What it sells are those chips that quietly keep the world running: power management and signal conversion. These chips are found in factory equipment, car chassis, and now, they are increasingly flooding into new areas.AI Data Center。 This quarter, this once rather dull company has suddenly shown potential for a valuation re-rating, much like how the AI storage sector transformed commodity memory chips into core infrastructure. Key highlights from Texas Instruments' earnings report: Although the performance in the past quarter was lackluster, the guidance, which truly determines valuation, underwent significant changes: Guidance exceeded expectations, with Q1 showing no signs of a typical off-season. $Texas Instruments (TXN.US)$ The Q1 revenue guidance was set at $4.32 billion to $4.68 billion, with a midpoint of $4.5 billion, surpassing Wall Street analysts’ average estimate of $4.42 billion by $80 million. The midpoint EPS guidance of $1.35 also exceeded the expected $1.26 by $0.09. Data center demand is no longer just speculation. Texas Instruments' management revealed that Q4 data center revenueincreased by approximately 70% year-over-year, and this business has accounted for a portion of the total sales in 20259%. Most crucially, the managementannounced plans to separately disclose sales data for the data center business going forward,which means the 'AI narrative' is no longer an abstract concept. Recovery in the analog chip cycle Analog chips in ex...
Recovery of the analog chip cycle
After experiencing a prolonged downturn, analog chips finally bottomed out last year. In this quarter, Texas Instruments’ management indicated a high degree of certainty regarding the recovery of industrial demand, while automotive demand showed only a mild recovery. The market also believes that the multi-year inventory correction for analog chips has largely been completed, laying the groundwork for accelerated growth heading into 2026.
Driven by this dual factor of 'AI story + cycle bottoming out,' Texas Instruments’ stock surged over 8% in after-hours trading.
Will the script for AI memory play out again for analog power?
The reason memory stocks have been revalued is that AI inference has redefined memory chips from 'cheap capacity' to 'performance + capacity infrastructure.'
Texas Instruments' earnings report is replicating this logic in the analog chip space:AI racks don’t just buy computing power and graphics memory; every rack is exponentially driving demand for power conversion, voltage regulation, sensing, and signal integrity chips.If the exposure to data centers is both growing and can be clearly disclosed, then analog and power chips may no longer trade like purely cyclical industrial stocks, instead gaining structural valuation premium support.
What other targets in the same industry are worth paying attention to?
An AI narrative of this magnitude will not benefit just a single stock. The core logic isAI investment opportunities are expanding from GPUs and memory to the power and signal levels。
Author | Eric Texas Instruments isn't about GPUs, CPUs, or storage. It's not flashy. What it sells are those chips that quietly keep the world running: power management and signal conversion. These chips are found in factory equipment, car chassis, and now, they are increasingly flooding into new areas.AI Data Center。 This quarter, this once rather dull company has suddenly shown potential for a valuation re-rating, much like how the AI storage sector transformed commodity memory chips into core infrastructure. Key highlights from Texas Instruments' earnings report: Although the performance in the past quarter was lackluster, the guidance, which truly determines valuation, underwent significant changes: Guidance exceeded expectations, with Q1 showing no signs of a typical off-season. $Texas Instruments (TXN.US)$ The Q1 revenue guidance was set at $4.32 billion to $4.68 billion, with a midpoint of $4.5 billion, surpassing Wall Street analysts’ average estimate of $4.42 billion by $80 million. The midpoint EPS guidance of $1.35 also exceeded the expected $1.26 by $0.09. Data center demand is no longer just speculation. Texas Instruments' management revealed that Q4 data center revenueincreased by approximately 70% year-over-year, and this business has accounted for a portion of the total sales in 20259%. Most crucially, the managementannounced plans to separately disclose sales data for the data center business going forward,which means the 'AI narrative' is no longer an abstract concept. Recovery in the analog chip cycle Analog chips in ex...
– $ON Semiconductor (ON.US)$ ：High leverage in AI cabinet power delivery, and if automotive demand no longer lags, it will add cyclical explosiveness.
– $Analog Devices (ADI.US)$ ：High-value analog and signal chain chips are tied to power monitoring, sensing, and system reliability, with a solid base in industrial recovery.
– $Microchip Technology (MCHP.US)$ ：If industrial inventory digestion ends, its capacity utilization and profit margins will see a strong rebound, often making it a high-elasticity choice for betting on a cyclical reversal.
– $STMicroelectronics (STM.US)$ ：Power devices + embedded sensors, supported by a power-related narrative, but still highly sensitive to automotive and industrial cycles.
– $INFINEON TECHNOLOG (IFNNY.US)$ ：A global bellwether for power semiconductors, typically viewed as a pure play on energy efficiency and power architecture upgrades, with automotive business being the key variable.
Risk Disclaimer: The above content only represents the author's view. It does not represent any position or investment advice of Futu. Futu makes no representation or warranty.Read more
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