Shares of leading semiconductor manufacturers Texas Instruments (TXN) and STMicroelectronics (STM) experienced sharp declines on Thursday despite both companies reporting strong quarterly performances and robust artificial intelligence (AI) data center demand. The sell-offs underscore investor jitters around valuations and near-term growth expectations, even as the underlying businesses signal a broad-based recovery.
Texas Instruments saw its stock drop approximately 5% in premarket trading after closing the previous session at $294.19. The company posted record Q2 revenue of $5.46 billion, a 23% year-over-year increase that beat the $5.24 billion consensus. Adjusted EPS reached $2.09, compared to estimates of $1.92. Both the analog and embedded processing segments grew, fueled by a doubling of data center sales and an accelerating automotive market. For Q3, TXN guided revenue between $5.65 billion and $6.15 billion, with a midpoint above analyst expectations, but the stock’s roughly 70% year-to-date surge may have raised the bar too high for a positive reaction.
STMicroelectronics fared even worse, plummeting as much as 15% in European trading to around $59 per share in U.S. premarket. While Q2 net income swung to a $222 million profit from a year-ago loss and revenue rose 12.7% to $3.49 billion, the company’s Q3 revenue forecast of $3.70 billion missed consensus estimates of $3.76–$3.80 billion. CEO Jean-Marc Chery emphasized that AI data center revenue is on track to exceed $1 billion in 2026 and more than double by 2027, with Q4 revenue projected above $4 billion. However, STM’s elevated price-to-earnings ratio of around 428x triggered valuation concerns, with some analysts labeling it significantly overvalued.
The contrasting stock reactions highlight a market environment where strong fundamentals may not be enough if valuations are stretched or short-term guidance slightly disappoints. For the crypto sector, which often correlates with tech and semiconductor trends due to mining hardware demand and blockchain infrastructure, the developments suggest cautious sentiment. However, no direct impact on specific crypto assets was identified from these earnings reports.
