Three months ago Texas Instruments did something it had not done in years: it told investors that demand was showing up everywhere and that it had begun raising prices. That shift, from a cautious, wait-and-see posture to the language of a broad-based upcycle, set up the third-quarter report as a test of whether the recovery has real staying power or was simply a restocking burst that peaks quickly.
Wall Street expects earnings of $2.39 per share on revenue of $5.91 billion. That would be EPS growth of roughly 61.5% and revenue growth of about 24.6% from a year ago, when the company earned $1.48 on $4.74 billion. Those numbers reflect operating leverage at work. Revenue gains are being amplified by higher factory loadings, and that is exactly what a fixed-cost-heavy manufacturer like TI is built to deliver once demand turns. Management guided to $2.33 to $2.57 per share on revenue of $5.65 billion to $6.15 billion, and the Street sits essentially at the revenue midpoint while landing a touch below the $2.45 EPS midpoint. The whisper number of $2.46 is modestly above consensus and right around the middle of guidance. That suggests the informal bar assumes TI simply executes on its own outlook rather than beats it by a wide margin.
The most important evidence will come from the drivers management highlighted last quarter. Gross margin jumped 340 basis points to 61% as loadings rose after being cut in late 2025. Holding or extending that level would confirm that utilization gains are compounding, not fading. Pricing is the newer story. Management described increases being rolled out customer by customer, with the effect building through the back half of the year and into 2027. Any sign that pricing is contributing meaningfully to revenue, and that it is outrunning the rising input costs management flagged, would validate the upcycle thesis. Automotive is the other fresh catalyst. After a flat sequential first quarter, autos grew upper single digits sequentially in the second quarter, helped by China EV and hybrid demand and thin customer inventories. Another quarter of sequential growth would show the inflection is real. A stall would revive doubts about whether one region's strength can carry the segment.
Industrial, up around 30%, and data center, which doubled year over year, need to keep their pace. The 800-volt data center power transition gives TI more conversion stages to serve, so continued triple-digit-type growth there would reinforce a structural story rather than a cyclical one. Personal electronics remains the soft spot, with memory shortages squeezing customers and growth expected below the usual seasonal pattern. A modest miss there would not derail the narrative, but a further downgrade could hint at broader supply-chain friction. Lead times, which had stretched by a couple of weeks, are a quiet but useful tell. Further lengthening would support pricing power, while a reversal would undercut it.
The market has not paid much for the improvement. The stock is up only 1.6% since the last report, trailing the S&P 500 by 3.6 percentage points, and it remains well below the prior quarter's high of about $334. Bullish sentiment has also cooled noticeably, falling to 42.2% from 62.5% ahead of last quarter. Shares sit comfortably above the 200-day moving average near $252 and in the upper portion of their post-earnings range, but still about 6% beneath that range's high of roughly $299. The setup is not stretched.
The central question is whether TI's fourth-quarter outlook keeps the upcycle story intact. A guide that holds revenue near third-quarter levels or higher, paired with stable or rising gross margin, would suggest pricing and auto recovery are offsetting normal seasonal softness. A guide that leans heavily seasonal would imply the second-quarter surge front-loaded the recovery. Commentary from the incoming CFO on margins and capital spending will also shape how much of the improvement investors believe is durable.