Latest earnings reports from leading chip stocks signal that the expansion phase of the current chip cycle is ending. Micron Technology, Inc., as one of the most cyclical chip stock, faces large downsides due to its particular product mix. Memory semiconductors and storage hardware are among the most discretionary and commoditized items for the IT industry, in my view.
Texas Instruments (TXN) stock dropped 12% after the company issued third-quarter guidance that fell short of Wall Street's earnings expectations, raising concerns over the impact of ongoing tariffs and geopolitical uncertainty. While the semiconductor firm delivered better-than-expected second-quarter results, investors appeared more focused on the company's cautious tone for the quarters ahead.
Texas Instruments shares dropped after the company issued weak earnings guidance and said uncertainty over tariffs has weighed on demand. The midpoint of the company's third-quarter earnings forecast came up short of analyst expectations.
Texas Instruments Inc (NASDAQ:TXN) shares plunged 12% as the semiconductor company issued a soft outlook for the third quarter, which overshadowed strong results for Q2. The company guided Q3 revenue between $4.45 billion and $4.8 billion, compared to Street estimates of $4.59 billion.
Texas Instruments' Q2 2025 results were not as bad as the share price reaction would suggest. Overly optimistic expectations, coupled with broader trends in the semiconductors sector are to blame for the sharp drop. Although we are seeing some early signs of a recovery, it is too early to jump-in and buy TXN stock.
Texas Instruments shares slumped nearly 12% in premarket trading on Wednesday, after its quarterly profit forecast indicated a hit to demand for its analog chips that stoked investor fears of tariff-related disruptions.
Analysts say the tone on the earnings call was “moody” and “appears to have shifted markedly” as executives express more caution.
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