TI shares slide as bleak outlook signals prolonged chip market slump

Core Viewpoint - Texas Instruments (TI) shares fell over 8% in premarket trading due to a disappointing fourth-quarter profit and revenue outlook, raising concerns about a slow recovery in the analog chip market amid tariff uncertainties affecting the broader industry [1][2]. Company Summary - TI has reduced its exposure to tariffs through trade deals, but ongoing uncertainty regarding additional tariffs and trade negotiations has negatively impacted investor sentiment and slowed recovery [2]. - The company forecasts fourth-quarter revenue of $4.4 billion and earnings per share of $1.26, both significantly below market expectations [3]. - TI reported third-quarter earnings of $1.48 per share, slightly below the consensus estimate of $1.49, affected by restructuring charges and lower gross margins [4]. - TI has committed over $60 billion to expand its U.S. manufacturing capabilities, emphasizing its focus on onshoring chip supply chains [4]. - Following the earnings report, at least five brokerages have lowered their price targets for TI's stock [4]. Industry Summary - The overall recovery in the analog chip market is expected to be slower than anticipated, with J.P. Morgan analysts indicating that the industry may continue to face challenges from tariffs and a sluggish recovery in the automotive sector [2]. - The stock has decreased approximately 3.5% year-to-date, resulting in a 12-month forward price-to-earnings ratio of 29.03, which is higher compared to competitors Analog Devices and Micron Technology, which have ratios of 26.24 and 11.98, respectively [5].