Texas Instruments (TXN) posted first-quarter revenue of $4.8 billion — a 19% year-over-year jump — while ServiceNow (NOW) raised its full-year subscription revenue guidance by $205 million after beating Q1 subscription growth targets. Both results came after Wednesday's close, each shaped by themes of industrial recovery, AI-fueled demand, and managements expressing confidence despite macro uncertainty.
Texas Instruments Sees Data Center and Industrial Outpace
TXN's segment details stood out: industrial revenue increased more than 30% year over year and was up more than 20% sequentially, according to CEO Haviv Ilan. Data center revenue grew about 90% year over year and over 25% sequentially. Automotive was nearly flat sequentially and up mid-single digits year over year. Communications equipment rose about 25% year over year and more than 30% sequentially. Gross profit for the quarter reached $2.8 billion, or a 58% gross margin. The company announced an agreement to acquire Silicon Labs, expected to close in the first half of 2027. For Q2, TXN guided revenue from $5 billion to $5.4 billion and EPS in the range of $1.77 to $2.05.
ServiceNow delivered its own beat: subscription revenue grew 19% in constant currency, above expectations. The company raised full-year subscription guidance to reflect 20.5% to 21% year-over-year growth, a $205 million increase. CEO Bill McDermott placed the company’s AI control tower at the center of a $600 billion total addressable market. Recent acquisitions of Armis, VESA, and Moveworks are intended to deepen ServiceNow's AI and security features. Some on-premise deals shifted into future quarters, but according to CFO Gina Mastantuono, the guidance was not reduced for those deferrals.
Stocks365 Take: Segment Outperformance, Macro Cues, and Rate Context
Neither company operates in isolation. While interest rates/rate spreads are not cited directly in earnings calls, the macro context remains relevant—capital spending cycles in sectors like industrials and enterprise tech are influenced by borrowing costs and the yield curve, which recently turned positive. Management comments from both companies reflected awareness of macro noise, but their guidance suggests continued confidence in AI and infrastructure-driven demand.
For ServiceNow, the control tower narrative holds as long as its AI platform differentiates against peers. A few delayed deals represent a timing issue rather than immediate risk, as per management commentary. For Texas Instruments, broad-based industrial strength and outperformance in data center provide a strong setup for Q2, but ongoing macro uncertainty—explicitly mentioned as a factor in guidance—warrants close monitoring of order flow in May.
Comparisons and Risks: AI, Cycles, and Global Events
The current setup shows echoes of mid-2023, when Microsoft, Alphabet, and Amazon reported collapsing cloud pessimism due to AI demand. The difference now is a steeper yield curve and a further-progressed industrial recovery. Source content from the CSX CEO highlights ongoing risks around geopolitical disruption, inflation, and energy prices. As AI-driven growth pulls forward demand for both TXN and NOW, broader supply chain and inflationary cross-currents remain a wildcard—opportunities for some, challenges for others.
Thursday Watchlist: Industrial Orders, Guide Midpoints, and Enterprise SaaS Signals
Investors in Texas Instruments should track how markets treat the Q2 guidance range and whether broad-based industrial orders continue into May. The analog segment’s 22% year-over-year growth is a key durability marker. The Silicon Labs deal underscores TXN’s commitment to wireless connectivity, adding future upside. For ServiceNow, the rate of large deal closures, particularly on-prem, becomes the focus. CEO Bill McDermott’s maintained guidance will be tested if on-prem delays persist; competition can press NOW’s premium valuation if the "AI control tower" advantage narrows. Both stories remain live signals for capital allocation across sectors navigating the current macro landscape.