Morgan Stanley raises Texas Instruments estimates on chip demand

Investing.com -- Morgan Stanley raised its second and third quarter estimates for Texas Instruments based on continued strength in the semiconductor recovery, according to a research note published Monday.

The firm's AlphaWise distributor survey for the second quarter of 2026 showed that momentum from the first quarter is extending into September, though at a slower pace than the sharp acceleration seen earlier in the year.

Morgan Stanley said it expects strong June quarter results across the sector. The survey showed no distributors expect declines in analog or microcontroller units. Industrial demand held steady while automotive showed mixed results.

The firm raised its June and September quarter estimates for Texas Instruments, projecting above-seasonal growth in both periods. The increases reflect strength in analog and industrial segments, data center growth, and stable pricing. Morgan Stanley maintained its underweight rating on the stock.

Analog and microcontroller chips are shipping above demand levels, while distributor momentum slowed as inventory-building plans moderated. Morgan Stanley characterized this as a measured continuation rather than a reversal, noting that momentum remains positive without weaker pricing or deteriorating forward expectations.

The recovery appears driven by demand rather than broad inventory restocking, with selective replenishment and supply tightness in certain areas.

Morgan Stanley kept estimates unchanged for other semiconductor companies. The firm said Analog Devices has the clearest exposure to analog and industrial trends, while ON Semiconductor is best positioned for selective power chip tightness. NXP Semiconductors could benefit if automotive demand improves, and Microchip Technology remains positioned for microcontroller and pricing gains later in the second half and fourth quarter.

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