NEW YORK — Texas Instruments shares slid 2.8 percent this week, extending a two-month decline as demand for its core analog and embedded processing chips weakened. The company's latest quarterly guidance projected revenue between $4.1 billion and $4.5 billion for the current period, missing prior analyst consensus by more than 8 percent. The shortfall signals a persistent inventory correction across its industrial, personal electronics and automotive segments, which collectively account for more than 60 percent of revenue.
Analog Devices, a direct competitor in the high-performance analog market, fared worse, dropping 4.1 percent over the same period. Both chipmakers are heavily exposed to cyclical industrial capital expenditure and global vehicle production, both of which have decelerated in recent quarters. Citi analyst Christopher Danly downgraded Analog Devices to Neutral from Buy, citing a lack of clear demand signals from enterprise clients and automotive manufacturers for products such as power management ICs and data converters.
The downturn stems from customer inventory adjustments that began after pandemic-era supply chain disruptions prompted industrial and automotive clients to over-order components. Those excess inventories are now being worked through, sharply reducing new order volumes for both Texas Instruments and Analog Devices. The destocking process is taking longer than analysts initially forecast, pushing recovery expectations into late 2025 or early 2026.
Guggenheim analyst John Murphy maintained a Sell rating on Texas Instruments with a price target of $175, implying 17 percent downside from recent trading levels. Murphy said TI's broad industrial exposure makes it especially vulnerable during manufacturing slowdowns and expects gross margins to compress as production rates fall and pricing pressure increases across the analog portfolio.
The analog semiconductor market contrasts sharply with AI-driven segments. Nvidia rose 2.3 percent to $212.06, driven by demand for its data center GPUs. Investors need to differentiate between the AI infrastructure buildout and cyclically exposed chip sectors; analog chip recovery depends on a broader rebound in global manufacturing activity and a normalization of customer inventory levels.
