Morgan Stanley Lifts Texas Instruments Estimates on Chip Demand, Maintains Underweight Rating

Morgan Stanley has raised its second and third-quarter estimates for Texas Instruments (NASDAQ: TXN), citing continued strength in the semiconductor market recovery. In a research note published Monday, the investment bank pointed to positive distributor feedback indicating that momentum from the first quarter is extending into the back half of the year.

Survey Signals Continued Strength

The revision is based on Morgan Stanley's AlphaWise distributor survey for the second quarter of 2026, which suggested a broad-based recovery is underway. While the pace of acceleration has slowed from the sharp rebound seen earlier in the year, the firm said it expects strong June quarter results across the semiconductor sector.

Key findings from the survey include:

• No distributors surveyed anticipate declines in analog or microcontroller unit shipments.
• Demand from the industrial sector held steady, while the automotive sector showed mixed results.
• The recovery appears to be driven by genuine end-market demand rather than broad inventory restocking.

Texas Instruments Outlook Raised

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For Texas Instruments specifically, Morgan Stanley is now projecting above-seasonal growth for both the June and September quarters. The firm attributed the higher estimates to particular strength in the company's analog and industrial segments, alongside growth in data centers and stable pricing.

Despite the improved near-term outlook, Morgan Stanley reiterated its Underweight rating on TXN stock, signaling a more cautious long-term view. The note also observed that analog and microcontroller chips are currently shipping above demand levels as inventory-building plans have moderated.

Broader Sector Context

Morgan Stanley kept its estimates unchanged for other semiconductor companies it covers. The firm noted that Analog Devices (NASDAQ: ADI) has the most direct exposure to the positive analog and industrial trends. It also highlighted that ON Semiconductor (NASDAQ: ON) is well-positioned to benefit from supply tightness in certain power chips, while NXP Semiconductors (NASDAQ: NXPI) could see gains if automotive demand improves.