Nvidia, TSMC-rival Texas Instruments (NASDAQ:TXN) shares are on the rise in Wednesday's pre-market trading, following the announcement of its second-quarter earnings that exceeded expectations.
What Happened: Texas Instruments saw a 2.75% increase in its shares during pre-market trading on Wednesday.
The company reported second-quarter earnings of $1.22 per share, surpassing the analyst consensus estimate of $1.17 by 4.27%. The quarterly sales, which amounted to $3.82 billion, were in line with the analyst consensus estimate.
The company's strong cash flow was attributed to the robustness of its business model, the quality of its product portfolio, and the benefits of 300mm production.
Looking ahead, Texas Instruments expects its third-quarter revenue to range between $3.94 billion and $4.26 billion.
Why It Matters: The semiconductor sector, currently dominated by Jensen Huang's chip giant Nvidia Corp. (NASDAQ:NVDA), has been in the spotlight, with stocks up 40% year-to-date in 2023, largely driven by the growing interest in artificial intelligence. Recently, Bernstein analyst Stacy Rasgon noted multiple expansion opportunities as a key catalyst and picked Nvidia Texas Instruments and Qualcomm to "most likely to see support for numbers" in the second half of the year.
In May, activist investor Elliott Management took a $2.5 billion stake in Texas Instruments. The hedge fund, known for shareholder activism, advocated for enhanced free cash flow through a more flexible approach to capital expenditures, as reported in a press release.
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This story was generated using Benzinga Neuro and edited by Pooja Rajkumari