Texas Instruments Beats Q3 Estimates as Data Center Sales Nearly Double, Guides Q4 Above Consensus

TXN reported third-quarter 2026 results after the close on Oct. 21 that beat on both lines. Revenue rose 28% from a year earlier and 11% sequentially to $6.06 billion, ahead of the $5.92 billion consensus, and EPS of $2.62 topped the $2.42 estimate. Net income climbed 78% to $2.43 billion and operating profit rose 73% to $2.87 billion. By reporting segment, Analog revenue grew 32% and Embedded Processing 21%, while the small Other segment declined 6%.

The standout was data center. On the earnings call, CEO Haviv Ilan said data center revenue grew about 95% year over year and about 20% sequentially, and it now makes up roughly 13% of total revenue, according to call summaries. That figure comes from the call, not the press release, which only cited continued broad growth in industrial, automotive and data center markets. TI's release also noted that EPS included a 1-cent reduction that was not in its original guidance, and inventory ended the quarter at about $4.7 billion, up $67 million sequentially but below the $4,829 million of a year earlier, with days of inventory down to 194.

TI guides one quarter at a time, and its fourth-quarter outlook of $5.8 billion to $6.3 billion in revenue and $2.45 to $2.79 in EPS came in above analyst consensus of $5.75 billion and $2.27. Bloomberg framed it as a forecast that tops estimates after demand picked up. The guide is not a raise of a prior full-year outlook, and its revenue midpoint is roughly flat against the third quarter's actual, which management described as better than typical seasonal patterns.

The stock's 2.47% gain to a $284.65 close on Oct. 21 came in the regular session before the release, so it is not a reaction to the results. The next session is the first read on how investors weigh the beat and the above-consensus guide. Key items to watch are whether data center momentum holds, whether industrial demand keeps recovering, and how inventory trends as TI runs its new capacity.