Shares of Texas Instruments (TXN, Financial), a key chip supplier for the automotive and manufacturing sectors, saw a significant drop in after-hours trading. The decline followed the company's concerning revenue forecast, which suggested that the recent surge in demand driven by tariffs might be short-lived.
Texas Instruments announced that third-quarter revenue is expected to range between $4.45 billion and $4.8 billion. Although analysts had an average estimate of $4.57 billion, some projections went as high as $4.8 billion. This outlook has sparked worries about a slower-than-expected recovery in spending, particularly among automotive and industrial clients. Many buyers have been delaying orders and working through existing inventories.
Following the earnings announcement, the company's stock fell by over 11% in after-hours trading. Despite this setback, Texas Instruments shares had gained 15% this year, benefiting from a broader rally in semiconductor stocks. CEO Haviv Ilan noted that the automotive business has not yet rebounded.
