Key Moments
- Morgan Stanley raised its June and September quarter estimates for Texas Instruments (NASDAQ:TXN) while keeping an underweight rating on the stock.
- The firm’s AlphaWise distributor survey for the second quarter of 2026 showed continued momentum in semiconductor demand extending into September, though at a slower pace than earlier in the year.
- Analog and microcontroller shipments remained above end-demand levels, with positive pricing and demand-driven recovery rather than broad-based inventory restocking.
Revised Outlook for Texas Instruments
Morgan Stanley increased its second and third quarter projections for Texas Instruments (NASDAQ:TXN) following signs of ongoing strength in the broader semiconductor recovery, according to a research note released Monday.
The bank raised its estimates for the June and September quarters, indicating expectations for above-seasonal growth in both periods. The upward revisions are tied to firm demand in analog and industrial businesses, rising data center activity, and pricing that has remained stable. Despite the more constructive earnings outlook, Morgan Stanley reiterated its underweight stance on the shares.
AlphaWise Survey Signals Ongoing Momentum
The adjustments are based in part on Morgan Stanley’s AlphaWise distributor survey for the second quarter of 2026. The survey indicated that the strong momentum seen in the first quarter is persisting into September, though the pace has eased compared with the sharp acceleration earlier in the year.
Respondents reported resilient sector conditions heading into the June quarter. No distributors in the survey anticipated declines in analog or microcontroller units. Industrial demand was described as steady, while the automotive segment showed more mixed patterns.
| Segment / Indicator | Survey Finding |
|---|---|
| Analog units | No distributors expect declines |
| Microcontroller units | No distributors expect declines |
| Industrial demand | Held steady |
| Automotive demand | Mixed results |
| Distributor momentum | Slowed as inventory-building moderated |
Inventory Dynamics and Pricing Environment
Morgan Stanley noted that analog and microcontroller shipments are running ahead of underlying demand. At the same time, distributor momentum has cooled as earlier plans to build inventories have been scaled back.
The firm described this backdrop as a deliberate, measured continuation of the recovery rather than a reversal. Momentum remains positive, with no signs in the survey of weaker pricing or worsening forward expectations. The firm highlighted that the upturn appears to be fueled primarily by real demand instead of broad-based restocking, with inventory replenishment occurring selectively and some areas still seeing tight supply.
Implications Across the Semiconductor Sector
While lifting its forecasts for Texas Instruments, Morgan Stanley left its estimates unchanged for other semiconductor names covered in the note. The firm pointed to several differentiated positioning themes across the group:
- Analog Devices (NASDAQ:ADI) was identified as having the clearest link to analog and industrial trends reflected in the survey.
- ON Semiconductor (NASDAQ:ON) was cited as best aligned with selective tightness in power chips.
- NXP Semiconductors (NASDAQ:NXPI) was seen as a potential beneficiary if automotive demand strengthens from current mixed conditions.
- Microchip Technology (NASDAQ:MCHP) was described as remaining well placed to capture microcontroller and pricing upside later in the second half and into the fourth quarter.
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