April 22 (Reuters) – Texas Instruments forecast second-quarter revenue and profits above Wall Street expectations on Wednesday, anticipating a boost in demand for its analog chips amid the data center boom, sending its shares up over 8% in extended trading.
Tech firms have been spending aggressively to bolster their AI ambitions by constructing massive data center projects and buying large quantities of chips to run such infrastructure.
Texas Instruments makes analog chips, which perform a range of functions, including regulating power systems and converting signals such as sound, temperature or light into digital data that can be processed by other semiconductors.
TI is among the first chip companies to report earnings for the March quarter, making its results closely watched. TI is also hailed as a demand indicator for various industries due to the widespread use of its chips.
TI has been investing heavily to expand production capacity while moving to more cost-effective techniques that are expected to help boost margins over time.
Demand for analog chips has also been recovering as customers across the industrial and auto end markets resume placing orders after clearing out excess inventory they stored during the pandemic.
This, along with AI-driven demand, has boosted TI’s shares by over 35% to near-record highs this year.
The company expects second-quarter revenue of between $5 billion and $5.40 billion, compared with estimates of $4.86 billion, according to data compiled by LSEG.
It anticipates earnings per share of between $1.77 and $2.05, compared with estimates of $1.57 per share.
Revenue for the first quarter was $4.83 billion, beating estimates of $4.53 billion.
(Reporting by Zaheer Kachwala in Bengaluru; Editing by Vijay Kishore)
