The data center dividend spreads to a broader semiconductor field. Texas Instruments Incorporated (TXN.US) received multiple target price upgrades from several Wall Street major banks.

Texas Instruments Incorporated (TXN.US) saw its stock price rise by about 6.5% in pre-market trading on Wednesday after announcing its fourth quarter performance and latest outlook. The market believes that the growth opportunities brought by the global data center construction boom are expanding further from GPU and server manufacturers to a wider range of semiconductor sectors such as analog chips, power management, and network connectivity. Driven by this, several peer companies also saw a simultaneous pre-market increase in their stock prices. Analog Devices (ADI.US) and Infineon Technologies (IFNNY.US) both rose by about 4%, STMicroelectronics NV ADR RegS (STM.US) rose by 2.2%, and Microchip Technology Incorporated (MCHP.US) saw an increase of 6%. Jefferies analyst Blayne Curtis pointed out in a research report that the data center business is becoming an important driver of revenue growth for Texas Instruments Incorporated. The firm estimates that the company's fourth quarter data center-related revenue for the fiscal year 2025 will be around $450 million, achieving a mid-single-digit percentage increase quarter-on-quarter; and annual data center revenue will be around $1.5 billion, representing a 64% year-on-year increase. It is worth noting that Texas Instruments Incorporated has now disclosed the data center as a separate end-market and further subdivided it into three major directions: computation (45%), networking (35%), and power transmission (20%). Jefferies believes that the future growth pace in this field may be highly correlated with the capital expenditure of global hyperscale cloud providers. In addition to data centers, Jefferies also mentioned that demand from industrial end-markets is improving, but growth in the automotive market remains moderate. However, the firm emphasized that overall performance represents a "mild positive" for the industry cycle, but does not significantly exceed market expectations; personal electronics and automotive business may still pose potential obstacles to the recovery of analog chips. Therefore, Jefferies maintains a "hold" rating on Texas Instruments Incorporated and raises the target price from $180 to $210. On the other hand, Morgan Stanley remains cautious. Analyst Joseph Moore stated that although there was an expectation of Texas Instruments Incorporated showing seasonally better-than-expected performance, more consecutive quarters of growth data need to be seen in order to build confidence in the sustainability of the recovery. Morgan Stanley continues to give the stock a "underweight" rating and slightly raises the target price to $180. In contrast, Bank of America Corp is more optimistic about the company's prospects. The bank upgraded its rating on Texas Instruments Incorporated from "underperform" to "neutral" and upgraded its rating on Microchip Technology Incorporated from "neutral" to "buy." Additionally, Bank of America Corp significantly raised the target price for Texas Instruments Incorporated to $235 and for Microchip Technology Incorporated to $95. Bank of America Corp analyst Vivek Arya pointed out that the signal of "analog chip recovery" released in the first quarter outlook by Texas Instruments Incorporated is very clear and has been confirmed through discussions with several top analog chip companies during CES. Arya believes that macroeconomic uncertainties still exist, but the relatively uncrowded analog chip sector is poised to regain market attention, driven by factors such as industrial inventory replenishment (shipments still lower than trend by 15%-20%), additional demand for data center power and connectivity, growth in aerospace and defense markets, and the increase in automotive electronics content, which will also bring structural opportunities.