Texas Instruments Inc. (TXN) shares climbed after the chipmaker did something it hasn't done in years: sound genuinely optimistic about what's coming next. Wall Street analysts took notice, raising their price targets after the company delivered guidance that suggests the long semiconductor slump might actually be ending.

The Numbers Look Fine, But the Outlook Matters More

Texas Instruments reported fourth-quarter results that technically missed expectations, but the details told a more encouraging story. The company posted $4.42 billion in revenue and $1.27 in earnings per share, falling just short of analyst forecasts of $4.44 billion and $1.30 per share. Still, revenue climbed 10% from a year earlier, which isn't exactly a disaster.

What really caught attention was the forward guidance. Texas Instruments projected first-quarter revenue of $4.32 billion to $4.68 billion and earnings of $1.22 to $1.48 per share. Consensus estimates had called for $4.42 billion in revenue and $1.26 per share in earnings, so the midpoint came in ahead of expectations.

Analysts Raise Price Targets and Point to Recovery

Cantor Fitzgerald analyst Matthew Prisco maintained Texas Instruments with a Neutral rating and raised the price target from $190 to $225. Benchmark analyst Cody Acree reiterated his Buy rating and lifted the target from $220 to $250. Rosenblatt analyst Kevin Cassidy kept his Buy rating and raised the target from $200 to $240.

The analysts weren't just reacting to one decent quarter. They're seeing signs of something bigger taking shape across multiple parts of the business.

Industrial and Data Center Demand Shows Real Strength

Prisco from Cantor Fitzgerald highlighted that Texas Instruments delivered its first forecast for positive sequential first-quarter growth since 2010. That's a notable shift after two quarters of conservative guidance. Management pointed to improving orders, a growing backlog, and elevated "turns" business—orders that ship within the same quarter—as evidence that demand is genuinely stabilizing.

Data center demand and a broad-based rebound in Industrial stood out as the main bright spots. The first-quarter outlook implies high-single-digit sequential growth in Industrial, which Prisco expects to continue gradually with particular strength in data center and advanced driver-assistance electronics.

Acree from Benchmark noted that Texas Instruments sparked an after-hours jump of as much as 8% after breaking its pattern of cautious guidance with an unusually upbeat March-quarter outlook. The company's first forecast for sequential first-quarter growth in more than 20 years caught the market's attention.

According to Acree, order patterns became more predictable and backlog visibility strengthened through the fourth quarter. The momentum spread across Industrial and Automotive, with each segment contributing about 33% of 2025 revenue. Industrial sales climbed 12% for the year and Automotive rose 6%, even though both dipped sequentially on normal seasonality.

The data center segment deserves special mention. Acree pointed out that it posted seven straight quarters of strong growth and reached about $1.5 billion in 2025 revenue, representing roughly 9% of the total. That's becoming a meaningful contributor.

Data Center Growth Accelerating Beyond Expectations

Cassidy from Rosenblatt emphasized that Texas Instruments's guidance for roughly 1.5% sequential revenue growth beat consensus expectations, driven primarily by higher order rates from industrial and data center customers. He views this as evidence that industrial demand is broadening and data center growth is accelerating.

The numbers back up that view. Management disclosed that data center revenue surged 70% year over year in the fourth quarter of fiscal 2025. Based on that momentum, Cassidy expects the data center business to exceed 12% of total revenue in 2026, up from about 9% in 2025.

Cassidy noted that while Analog, Embedded Processing, and Other segments all declined sequentially, management described a continuing market recovery with industrial and data center as the standout end markets.

Manufacturing Edge Positions Company for Recovery

Acree pointed out that Texas Instruments looks well-positioned for a broader chip-cycle recovery because it leads in multiple analog categories, carries inventory it can use to meet short lead times, and keeps expanding higher-margin 300mm production capacity. Cassidy added that the company is ramping lower-cost manufacturing capacity just as it wraps up its accelerated capital spending cycle.

The quarter did include a six cent EPS headwind tied to goodwill on legacy products, according to Cassidy, but that seems like a minor accounting issue compared to the improving demand trends.

Texas Instruments stock traded higher by 9.25% at $214.87 on Wednesday following the results and analyst commentary.