Texas Instruments and Lam Research reported earnings, with coverage framing an AI equipment boom alongside an analog rebound.
Lam Research and Texas Instruments both report after the market close on Wednesday, October 21, and each faces a different kind of pressure. Lam must show that AI equipment demand is still accelerating. Texas Instruments (NASDAQ: TXN) must show that its industrial and auto rebound can last.
Texas Instruments hosts its call at 3:30 p.m. Central time (4:30 p.m. ET). Lam Research (NASDAQ: LRCX) follows at 5:00 p.m. ET.
**Texas Instruments Faces a Test of Its Own Guidance**
Texas Instruments makes analog chips that handle real-world signals such as power and temperature. It also makes embedded processors, the small control chips built into machines. On its prior earnings call, Texas Instruments said revenue rose 13% sequentially and 23% year over year. Industrial, data center, and automotive customers led the growth.
The company guided third-quarter revenue to $5.65 billion to $6.15 billion and EPS to $2.23 to $2.57. The consensus EPS estimate of $2.42 falls inside that range, so the fourth-quarter outlook carries more weight. Management said industrial revenue remains below its 2022 peak and that customer inventories have not been rebuilt. Auto demand picked up, led by electric vehicles and hybrids in China. Shares are up 59.2% year to date.
**Lam Research Rides AI Demand Into Record Guidance**
Lam sells deposition and etch tools, the machines that add and carve away thin layers of material on silicon wafers. On its prior earnings call, Lam said it delivered record revenue, operating margin, and earnings per share "as AI-driven demand continues to reshape the semiconductor industry," positioning it for "a third consecutive year of outperformance in 2026."
Lam guided September-quarter revenue to $8.1 billion, plus or minus $400 million, and EPS to $2.15, plus or minus $0.15. It also raised its 2026 forecast for wafer fab equipment spending, which is what the whole industry spends on chipmaking tools, to the low $150 billion range.
In an August 26 Bloomberg Businessweek report, Lam Research said its advanced packaging business is growing more than 70% year over year. Advanced packaging stacks memory and processor chips in three dimensions and wires them together so that AI hardware works as one large system. Lam shares are down 12.1% over the past week and up 59.0% year to date.
**Consensus Points to Steep Year-Over-Year Gains**
| Estimate | Lam Research | Texas Instruments |
|---|---|---|
| Current-quarter EPS | $2.18 | $2.42 |
| EPS growth vs. prior year | 72.8% | 63.2% |
| Current-quarter revenue | $8.1 billion | $5.9 billion |
| Revenue growth vs. prior year | 52.8% | 24.6% |
| Full-year EPS | $9.48 (FY June 2027) | $8.51 (FY 2026) |
| Full-year revenue | $34.9 billion | $21.9 billion |
**Chip Shortages Feed Lam's Order Book**
Jim Cramer described the demand picture on October 19, saying CPUs are "going to be in very short supply, which I think is absolutely true because Taiwan Semi can't make all the ones that they have." He added, "There's tremendous demand, and there's also an inability to build." On October 9, he said, "Taiwan Semi controlled pretty much any chip stock."
When chipmakers cannot build fast enough, they add factory capacity, which means buying more deposition and etch tools from Lam. Lam said the industry remains meaningfully undersupplied, with several new fabs expected to come online by the end of 2027. The same buildout is pulling in power, cooling, and networking suppliers alongside the chipmakers. (We rounded up seven of those names in a free AI infrastructure report.)
**What Each Company Must Prove on Wednesday**
Texas Instruments needs a fourth-quarter outlook showing that industrial and automotive demand is still climbing. Lam needs revenue close to its $8.1 billion guidance and more detail on 2027, a year management has already called a potentially strong setup.
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