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Albion Financial Group UT reduced its stake in Texas Instruments Incorporated (NASDAQ:TXN – Free Report) by 19.8% in the 3rd quarter, according to the company in its most recent 13F filing with the Securities and Exchange Commission. The institutional investor owned 24,345 shares of the semiconductor company’s stock after selling 5,992 shares during the period. Albion Financial Group UT’s holdings in Texas Instruments were worth $6,819,000 at the end of the most recent reporting period.

Several other hedge funds also recently added to or reduced their stakes in TXN. Strengthening Families & Communities LLC lifted its holdings in Texas Instruments by 3.1% in the third quarter. Strengthening Families & Communities LLC now owns 5,442 shares of the semiconductor company’s stock worth $1,524,000 after acquiring an additional 165 shares during the last quarter. Sowell Financial Services LLC raised its position in shares of Texas Instruments by 7.3% during the 3rd quarter. Sowell Financial Services LLC now owns 4,950 shares of the semiconductor company’s stock worth $1,386,000 after purchasing an additional 338 shares during the period. Atticus Wealth Management LLC lifted its holdings in shares of Texas Instruments by 5.8% in the 3rd quarter. Atticus Wealth Management LLC now owns 1,829 shares of the semiconductor company’s stock worth $512,000 after purchasing an additional 101 shares during the last quarter. Axecap Investments LLC lifted its holdings in shares of Texas Instruments by 1.4% in the 3rd quarter. Axecap Investments LLC now owns 14,954 shares of the semiconductor company’s stock worth $4,188,000 after purchasing an additional 201 shares during the last quarter. Finally, Quadrant Capital Group LLC lifted its holdings in shares of Texas Instruments by 5.4% in the 3rd quarter. Quadrant Capital Group LLC now owns 21,056 shares of the semiconductor company’s stock worth $6,061,000 after purchasing an additional 1,078 shares during the last quarter. 84.99% of the stock is owned by hedge funds and other institutional investors.

Texas Instruments News Summary Here are the key news stories impacting Texas Instruments this week:

Positive Sentiment: Strong quarterly beat: Texas Instruments reported third-quarter revenue of approximately $6.06 billion and earnings per share of $2.62, exceeding Wall Street expectations of roughly $5.94 billion and $2.43, respectively. EPS also rose substantially from $1.48 a year earlier. TI reports third quarter 2026 financial results and shareholder returns Positive Sentiment: Broad-based demand growth: Profit reached $2.43 billion, supported by growth across industrial, automotive and data-center markets. The results suggest that recovering analog-chip demand is beginning to benefit Texas Instruments as heavy factory investment starts to moderate. Texas Instruments Posts Higher Profit, Revenue Positive Sentiment: Sales outlook exceeded expectations: Management’s quarterly sales forecast was reported above analyst estimates, providing an additional catalyst after the earnings beat and potentially reinforcing expectations for continued recovery. Analog chipmaker Texas Instruments sees quarterly sales above estimates Positive Sentiment: Shareholder returns remain supportive: Texas Instruments recently raised its quarterly dividend 7% to $1.52 per share, strengthening the stock’s appeal to income-focused investors. Neutral Sentiment: Valuation remains demanding: Despite improving results, TXN trades at more than 40 times trailing earnings, leaving the stock sensitive to any disappointment in future growth, capacity utilization or guidance. Negative Sentiment: Insider selling is a cautionary signal: Recent disclosed activity showed numerous executives selling shares and no reported insider purchases over the past six months. These transactions may reflect compensation or diversification, but they could temper enthusiasm at the current valuation. Insider Activity at Texas Instruments In other Texas Instruments news, VP Tsedeniya Abraham sold 7,000 shares of Texas Instruments stock in a transaction dated Thursday, August 27th. The stock was sold at an average price of $264.63, for a total transaction of $1,852,410.00. Following the transaction, the vice president owned 23,181 shares of the company’s stock, valued at $6,134,388.03. The trade was a 23.19% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which is available through this hyperlink. 0.60% of the stock is currently owned by company insiders. Wall Street Analysts Forecast Growth Several brokerages have recently issued reports on TXN. TD Cowen reduced their price target on shares of Texas Instruments from $340.00 to $330.00 and set a “buy” rating for the company in a report on Monday. Cantor Fitzgerald reaffirmed a “neutral” rating on shares of Texas Instruments in a report on Tuesday. JPMorgan Chase & Co. increased their price objective on shares of Texas Instruments from $280.00 to $340.00 and gave the stock an “overweight” rating in a report on Thursday, July 23rd. Susquehanna lifted their price objective on shares of Texas Instruments from $300.00 to $340.00 and gave the company a “positive” rating in a research report on Tuesday, July 21st. Finally, Robert W. Baird boosted their target price on shares of Texas Instruments from $300.00 to $385.00 and gave the company an “outperform” rating in a research note on Thursday, July 23rd. Sixteen equities research analysts have rated the stock with a Buy rating, ten have assigned a Hold rating and four have issued a Sell rating to the company. Based on data from MarketBeat.com, Texas Instruments currently has a consensus rating of “Hold” and a consensus price target of $302.88.

Get Our Latest Analysis on Texas Instruments

Texas Instruments Trading Up 2.5% Shares of TXN stock opened at $284.65 on Thursday. The stock has a 50-day simple moving average of $271.76 and a 200 day simple moving average of $278.84. Texas Instruments Incorporated has a fifty-two week low of $152.73 and a fifty-two week high of $334.03. The stock has a market capitalization of $259.96 billion, a P/E ratio of 42.28, a P/E/G ratio of 1.55 and a beta of 1.35. The company has a quick ratio of 3.44, a current ratio of 4.86 and a debt-to-equity ratio of 0.72.

Texas Instruments (NASDAQ:TXN – Get Free Report) last released its earnings results on Wednesday, October 21st. The semiconductor company reported $2.62 EPS for the quarter, topping analysts’ consensus estimates of $2.40 by $0.22. The business had revenue of $6.05 billion for the quarter, compared to the consensus estimate of $5.94 billion. Texas Instruments had a net margin of 31.11% and a return on equity of 35.77%. The business’s revenue for the quarter was up 27.7% on a year-over-year basis. During the same period in the previous year, the firm earned $1.48 EPS. On average, sell-side analysts expect that Texas Instruments Incorporated will post 8.49 earnings per share for the current fiscal year.

Texas Instruments Increases Dividend The firm also recently announced a quarterly dividend, which will be paid on Tuesday, November 10th. Stockholders of record on Friday, October 30th will be issued a $1.52 dividend. The ex-dividend date is Friday, October 30th. This is an increase from Texas Instruments’s previous quarterly dividend of $1.42. This represents a $6.08 dividend on an annualized basis and a dividend yield of 2.1%. Texas Instruments’s dividend payout ratio is currently 86.45%.

(Free Report)

Texas Instruments Incorporated (NASDAQ:TXN) designs and manufactures analog and embedded semiconductor products used in industrial, automotive, personal electronics, communications equipment, and enterprise systems. Its analog products help manage power, sense and measure real-world signals, and support signal processing, while its embedded processing products provide computing and control functions within electronic systems.

The company offers a broad portfolio of semiconductors, including power-management devices, amplifiers, data converters, microcontrollers, processors, and connectivity products.

Further Reading Five stocks we like better than Texas Instruments GM Beat and Added a $20 Billion Buyback—Why Did the Stock Fall? Intercepting Growth: Karman Secures $218M Lockheed Martin Deal Tech Stocks Took a Hit—These 2 Pharma Stocks Are Near New Highs Chip Stocks Have Pulled Back—Here’s How 3 Semiconductor ETFs Stack Up for Investors Want to see what other hedge funds are holding TXN? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Texas Instruments Incorporated (NASDAQ:TXN – Free Report).

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Conference call at 3:30 p.m. Central time today on ti.com/ir 

, /PRNewswire/ -- Texas Instruments Incorporated (TI) (Nasdaq: TXN) today reported third quarter revenue of $6.06 billion, net income of $2.43 billion and earnings per share of $2.62. Earnings per share included a 1-cent reduction that was not in the company's original guidance.

Regarding the company's performance and returns to shareholders, Haviv Ilan, TI's chairman, president and CEO, made the following comments:

"Revenue increased 11% sequentially and 28% from the same quarter a year ago with continued broad growth in industrial, automotive and data center. "Our cash flow from operations of $9.9 billion for the trailing 12 months again underscored the strength of our business model, the quality of our product portfolio and the benefit of 300mm production. Free cash flow for the same period was $8.4 billion. "Over the past 12 months we invested $4.0 billion in R&D and SG&A, invested $2.6 billion in capital expenditures and returned $5.8 billion to owners. "TI's fourth quarter outlook is for revenue in the range of $5.80 billion to $6.30 billion and earnings per share between $2.45 and $2.79." Free cash flow, a non-GAAP financial measure, is cash flow from operations less capital expenditures, plus proceeds from U.S. CHIPS and Science Act (CHIPS Act) incentives.

Earnings summary

(In millions, except per-share amounts)

Q3 2026

Q3 2025

Change

Revenue

$

6,055

$

4,742

28 %

Operating profit

$

2,874

$

1,663

73 %

Net income

$

2,425

$

1,364

78 %

Earnings per share

$

2.62

$

1.48

77 %

Cash generation

Trailing 12 Months

(In millions)

Q3 2026

Q3 2026

Q3 2025

Change

Cash flow from operations

$

3,419

$

9,896

$

6,897

43 %

Free cash flow

$

2,956

$

8,422

$

2,415

249 %

Free cash flow % of revenue

40.6 %

14.0 %

Cash return

Trailing 12 Months

(In millions)

Q3 2026

Q3 2026

Q3 2025

Change

Dividends paid

$

1,298

$

5,174

$

4,949

5 %

Stock repurchases

$

48

$

636

$

1,611

(61) %

Total cash returned

$

1,346

$

5,810

$

6,560

(11) %

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

Consolidated Statements of Income

For Three Months Ended

September 30,

(In millions, except per-share amounts)

2026

2025

Revenue

$

6,055

$

4,742

Cost of revenue (COR)

2,168

2,019

Gross profit

3,887

2,723

Research and development (R&D)

530

518

Selling, general and administrative (SG&A)

476

457

Acquisition charges

7

—

Restructuring charges/other

—

85

Operating profit

2,874

1,663

Other income (expense), net (OI&E)

72

62

Interest and debt expense

141

141

Income before income taxes

2,805

1,584

Provision for income taxes

380

220

Net income

$

2,425

$

1,364

Diluted earnings per common share

$

2.62

$

1.48

Average shares outstanding:

Basic

914

909

Diluted

921

914

Cash dividends declared per common share

$

1.42

$

1.36

Supplemental Information

(Quarterly, except as noted)

Provision for income taxes is based on the following:

Operating taxes (calculated using the estimated annual effective tax rate)

$

390

$

249

Discrete tax items

(10)

(29)

Provision for income taxes (effective taxes)

$

380

$

220

A portion of net income is allocated to unvested restricted stock units (RSUs) on which we pay dividend equivalents. Diluted
EPS is calculated using the following:

Net income

$

2,425

$

1,364

Income allocated to RSUs

(14)

(8)

Income allocated to common stock for diluted EPS

$

2,411

$

1,356

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

Consolidated Balance Sheets

September 30,

(In millions, except par value)

2026

2025

Assets

Current assets:

Cash and cash equivalents

$

4,211

$

3,311

Short-term investments

3,931

1,875

Accounts receivable, net of allowances of ($27) and ($21)

2,620

2,062

Raw materials

497

431

Work in process

2,482

2,460

Finished goods

1,693

1,938

Inventories

4,672

4,829

Prepaid expenses and other current assets

1,446

1,799

Total current assets

16,880

13,876

Property, plant and equipment at cost

18,072

17,314

Accumulated depreciation

(6,239)

(4,966)

Property, plant and equipment

11,833

12,348

Goodwill

4,330

4,362

Deferred tax assets

1,054

1,089

Capitalized software licenses

301

237

Overfunded retirement plans

320

251

Other long-term assets

2,121

2,841

Total assets

$

36,839

$

35,004

Liabilities and stockholders' equity

Current liabilities:

Current portion of long-term debt

$

650

$

500

Accounts payable

837

779

Accrued compensation

675

724

Income taxes payable

60

79

Accrued expenses and other liabilities

795

1,036

Total current liabilities

3,017

3,118

Long-term debt

12,905

13,546

Underfunded retirement plans

118

125

Deferred tax liabilities

62

60

Other long-term liabilities

1,552

1,528

Total liabilities

17,654

18,377

Stockholders' equity:

Preferred stock, $25 par value. Shares authorized – 10; none issued

—

—

Common stock, $1 par value. Shares authorized – 2,400; shares issued – 1,741

1,741

1,741

Paid-in capital

5,202

4,410

Retained earnings

54,282

52,369

Treasury common stock at cost

Shares: September 30, 2026 – 827; September 30, 2025 – 832

(41,955)

(41,744)

Accumulated other comprehensive income (loss), net of taxes (AOCI)

(85)

(149)

Total stockholders' equity

19,185

16,627

Total liabilities and stockholders' equity

$

36,839

$

35,004

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For Three Months Ended

September 30,

(In millions)

2026

2025

Cash flows from operating activities

Net income

$

2,425

$

1,364

Adjustments to net income:

Depreciation

555

497

Amortization of capitalized software

21

20

Stock compensation

95

93

Deferred taxes

(26)

3

Increase (decrease) from changes in:

Accounts receivable

(100)

(128)

Inventories

(67)

(17)

Prepaid expenses and other current assets

16

18

Accounts payable and accrued expenses

75

86

Accrued compensation

135

121

Income taxes payable

319

107

Changes in funded status of retirement plans

(6)

13

Other

(23)

13

Cash flows from operating activities

3,419

2,190

Cash flows from investing activities

Capital expenditures

(463)

(1,197)

Proceeds from CHIPS Act incentives

—

75

Proceeds from asset sales

—

1

Purchases of short-term investments

(1,969)

(805)

Proceeds from short-term investments

1,399

1,260

Other

46

(15)

Cash flows from investing activities

(987)

(681)

Cash flows from financing activities

Repayment of debt

(500)

—

Dividends paid

(1,298)

(1,236)

Stock repurchases

(48)

(119)

Proceeds from common stock transactions

16

125

Other

(51)

(12)

Cash flows from financing activities

(1,881)

(1,242)

Net change in cash and cash equivalents

551

267

Cash and cash equivalents at beginning of period

3,660

3,044

Cash and cash equivalents at end of period

$

4,211

$

3,311

Supplemental cash flow information

Investment tax credit (ITC) used to reduce income taxes payable

$

79

$

43

Proceeds from CHIPS Act incentives

—

75

Total cash benefit related to the CHIPS Act

$

79

$

118

Segment results

(In millions)

Q3 2026

Q3 2025

Change

Analog:

Revenue

$

4,911

$

3,729

32 %

Operating profit

$

2,505

$

1,486

69 %

Embedded Processing:

Revenue

$

858

$

709

21 %

Operating profit

$

227

$

108

110 %

Other:

Revenue

$

286

$

304

(6) %

Operating profit *

$

142

$

69

106 %

* Includes Acquisition charges and Restructuring charges/other

Non-GAAP financial information

This release includes references to free cash flow and ratios based on that measure. These are financial measures that were not prepared in accordance with GAAP. Free cash flow is calculated as cash flows from operating activities (also referred to as cash flow from operations) less capital expenditures, plus proceeds from CHIPS Act incentives.

We believe that free cash flow and the associated ratios provide insight into our liquidity, our cash-generating capability and the amount of cash potentially available to return to shareholders, as well as insight into our financial performance. These non-GAAP measures are supplemental to the comparable GAAP measures.

Reconciliation to the most directly comparable GAAP measures is provided in the table below.

For Three
Months
Ended

September 30,

For 12

Months

Ended

September 30,

(In millions)

2026

2026

2025

Change

Cash flow from operations (GAAP) *

$

3,419

$

9,896

$

6,897

43 %

Capital expenditures

(463)

(2,578)

(4,817)

Proceeds from CHIPS Act incentives

—

1,104

335

Free cash flow (non-GAAP)

$

2,956

$

8,422

$

2,415

249 %

Revenue

$

20,766

$

17,266

Cash flow from operations as a percentage of revenue (GAAP)

47.7 %

39.9 %

Free cash flow as a percentage of revenue (non-GAAP)

40.6 %

14.0 %

* Includes cash benefits of $79 million, $469 million and $302 million from the CHIPS Act ITC used to reduce income taxes payable for the
three months ended September 30, 2026, and the twelve months ended September 30, 2026 and 2025, respectively.

This release also includes references to operating taxes, a non-GAAP term we use to describe taxes calculated using the estimated annual effective tax rate, a GAAP measure that by definition does not include discrete tax items. We believe the term operating taxes helps to differentiate from effective taxes, which include discrete tax items.

Notice regarding forward-looking statements

This release includes forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally can be identified by phrases such as TI or its management "believes," "expects," "anticipates," "foresees," "forecasts," "estimates" or other words or phrases of similar import. Similarly, statements herein that describe TI's business strategy, outlook, objectives, plans, intentions or goals also are forward-looking statements. All such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those in forward-looking statements.

We urge you to carefully consider the following important factors that could cause actual results to differ materially from the expectations of TI or our management:

Economic, social and political conditions, and natural events in the countries in which we, our customers or our suppliers operate, including global trade policies; Our ability to compete in products and prices in an intensely competitive industry; Market demand for semiconductors, particularly in the industrial and automotive markets, and customer demand that differs from forecasts; Losses or curtailments of purchases from key customers or the timing and amount of customer inventory adjustments; Evolving cybersecurity and other threats relating to our information technology systems or those of our customers, suppliers and other third parties; Our ability to successfully implement and realize opportunities from strategic, business and organizational changes, or our ability to realize our expectations regarding the amount and timing of associated restructuring charges and cost savings; Our ability to develop, manufacture and market innovative products in a rapidly changing technological environment, our timely implementation of new manufacturing technologies and installation of manufacturing equipment, and our ability to realize expected returns on significant investments in manufacturing capacity; Availability and cost of key materials, utilities, manufacturing equipment, third-party manufacturing services and manufacturing technology; Our ability to retain, train and recruit skilled personnel and effectively manage key employee succession; Product liability, warranty or other claims relating to our products, software, manufacturing, delivery, services, design or communications, or recalls by our customers for a product containing one of our parts; Financial difficulties of our distributors or semiconductor distributors' promotion of competing product lines to our detriment; or disputes with current or former distributors; Our ability to maintain or improve profit margins, including our ability to utilize our manufacturing facilities at sufficient levels to cover our fixed operating costs, in an intensely competitive and cyclical industry and changing regulatory environment; Compliance with or changes in the complex laws, rules and regulations to which we are or may become subject, or actions of enforcement authorities, that restrict our ability to operate our business or subject us to fines, penalties or other legal liability; Changes in tax law and accounting standards that impact the tax rate applicable to us, the jurisdictions in which profits are determined to be earned and taxed, adverse resolution of tax audits, increases in tariff rates, and the ability to realize deferred tax assets; Our ability to maintain and enforce a strong intellectual property portfolio and maintain freedom of operation in all jurisdictions where we conduct business; or our exposure to infringement claims; Our ability to make principal and interest payments on our debt when due; Instability in the global credit and financial markets; and Impairments of our non-financial assets. For a more detailed discussion of these factors, see the Risk factors discussion in Item 1A of our most recent Form 10-K. The forward-looking statements included in this release are made only as of the date of this release, and we undertake no obligation to update the forward-looking statements to reflect subsequent events or circumstances. If we do update any forward-looking statement, you should not infer that we will make additional updates with respect to that statement or any other forward-looking statement.

About Texas Instruments

Texas Instruments Incorporated (Nasdaq: TXN) is a global semiconductor company that designs, manufactures and sells analog and embedded processing chips for markets such as industrial, automotive, data center, personal electronics and communications equipment. At our core, we have a passion to create a better world by making electronics more affordable through semiconductors. This passion is alive today as each generation of innovation builds upon the last to make our technology more reliable, more affordable and lower power, making it possible for semiconductors to go into electronics everywhere. Learn more at TI.com.

TXN-G

SOURCE Texas Instruments Incorporated

IFP Advisors Inc grew its stake in shares of Texas Instruments Incorporated (NASDAQ:TXN – Free Report) by 32.9% during the 3rd quarter, according to its most recent 13F filing with the Securities & Exchange Commission. The fund owned 21,256 shares of the semiconductor company’s stock after purchasing an additional 5,263 shares during the quarter. IFP Advisors Inc’s holdings in Texas Instruments were worth $5,954,000 at the end of the most recent quarter.

A number of other institutional investors and hedge funds also recently made changes to their positions in TXN. HBW Advisory Services LLC increased its position in shares of Texas Instruments by 2.2% in the 1st quarter. HBW Advisory Services LLC now owns 1,730 shares of the semiconductor company’s stock valued at $336,000 after purchasing an additional 37 shares during the last quarter. Montz Harcus Wealth Management LLC raised its holdings in shares of Texas Instruments by 2.9% in the 1st quarter. Montz Harcus Wealth Management LLC now owns 1,338 shares of the semiconductor company’s stock valued at $260,000 after purchasing an additional 38 shares in the last quarter. Livforsakringsbolaget Skandia Omsesidigt lifted its position in shares of Texas Instruments by 0.6% during the 1st quarter. Livforsakringsbolaget Skandia Omsesidigt now owns 5,960 shares of the semiconductor company’s stock worth $1,157,000 after purchasing an additional 38 shares during the last quarter. Moody National Bank Trust Division lifted its position in shares of Texas Instruments by 0.6% during the 3rd quarter. Moody National Bank Trust Division now owns 6,063 shares of the semiconductor company’s stock worth $1,698,000 after purchasing an additional 39 shares during the last quarter. Finally, McGlone Suttner Wealth Management Inc. lifted its position in shares of Texas Instruments by 3.3% during the 3rd quarter. McGlone Suttner Wealth Management Inc. now owns 1,299 shares of the semiconductor company’s stock worth $364,000 after purchasing an additional 41 shares during the last quarter. Institutional investors own 84.99% of the company’s stock.

Wall Street Analysts Forecast Growth
TXN has been the subject of a number of analyst reports. Zacks Research downgraded shares of Texas Instruments from a “strong-buy” rating to a “hold” rating in a research note on Monday, September 21st. Mizuho raised their price target on Texas Instruments from $300.00 to $305.00 and gave the company a “neutral” rating in a research note on Thursday, July 23rd. UBS Group reaffirmed a “buy” rating and set a $380.00 price target (up from $350.00) on shares of Texas Instruments in a report on Thursday, July 23rd. Stifel Nicolaus upped their price objective on Texas Instruments from $340.00 to $360.00 and gave the stock a “buy” rating in a research report on Wednesday, June 24th. Finally, TD Cowen lowered their price objective on Texas Instruments from $360.00 to $340.00 and set a “buy” rating for the company in a research report on Thursday, July 23rd. Sixteen investment analysts have rated the stock with a Buy rating, ten have issued a Hold rating and four have issued a Sell rating to the company. According to data from MarketBeat.com, the company presently has an average rating of “Hold” and a consensus price target of $304.26.

View Our Latest Report on Texas Instruments
Insider Activity
In related news, VP Tsedeniya Abraham sold 7,000 shares of the firm’s stock in a transaction that occurred on Thursday, August 27th. The stock was sold at an average price of $264.63, for a total transaction of $1,852,410.00. Following the transaction, the vice president owned 23,181 shares in the company, valued at $6,134,388.03. This trade represents a 23.19% decrease in their position. The transaction was disclosed in a filing with the SEC, which is available through the SEC website. 0.60% of the stock is currently owned by company insiders.

Key Headlines Impacting Texas Instruments
Here are the key news stories impacting Texas Instruments this week:

Positive Sentiment: Texas Instruments’ history of exceeding earnings expectations, combined with favorable current earnings-estimate trends, has increased the possibility of another quarterly beat. Investors are also watching operating metrics beyond revenue and earnings per share for evidence of sustained demand. Will Texas Instruments Beat Estimates Again in Its Next Earnings Report?
Positive Sentiment: Analysts expect strength in Texas Instruments’ analog and embedded-processing businesses to support third-quarter results, reflecting demand from industrial, automotive and data-center markets. TXN to Report Q3 Earnings: Should You Buy, Hold or Sell the Stock?
Positive Sentiment: The board declared a fourth-quarter cash dividend of $1.52 per share, payable Nov. 10 to shareholders of record Oct. 30. The announcement reinforces TXN’s shareholder-return profile and may provide some support for income-focused investors. Texas Instruments Board Declares Fourth Quarter 2026 Quarterly Dividend
Positive Sentiment: Exchange-traded funds purchased approximately $113.2 million of TXN stock on Oct. 13, indicating institutional or index-related buying interest. ETFs Bought $113.2 Million of Texas Instruments
Neutral Sentiment: Wall Street’s third-quarter preview emphasizes key indicators such as segment performance, margins and demand trends. These metrics could be more important for TXN’s valuation than simply meeting consensus revenue and EPS estimates. Texas Instruments Q3 Earnings Key Metrics
Negative Sentiment: Geopolitical tensions remain a risk to semiconductor supply chains and international demand. In addition, TXN’s elevated valuation leaves less room for disappointment if its earnings outlook or margins fall short of expectations. TXN Q3 Earnings Investment Outlook

Texas Instruments Price Performance
Shares of TXN opened at $276.48 on Monday. The company has a debt-to-equity ratio of 0.72, a current ratio of 4.86 and a quick ratio of 3.44. Texas Instruments Incorporated has a 1-year low of $152.73 and a 1-year high of $334.03. The stock has a market cap of $252.50 billion, a PE ratio of 42.08, a price-to-earnings-growth ratio of 1.54 and a beta of 1.35. The firm has a fifty day moving average price of $271.75 and a 200 day moving average price of $277.05.

Texas Instruments (NASDAQ:TXN – Get Free Report) last issued its quarterly earnings data on Wednesday, July 22nd. The semiconductor company reported $2.14 earnings per share (EPS) for the quarter, topping the consensus estimate of $1.91 by $0.23. Texas Instruments had a return on equity of 35.77% and a net margin of 31.11%. The company had revenue of $5.46 billion for the quarter, compared to analyst estimates of $5.26 billion. During the same quarter last year, the company posted $1.41 earnings per share. The business’s quarterly revenue was up 22.8% compared to the same quarter last year. Texas Instruments has set its Q3 2026 guidance at 2.230-2.570 EPS. As a group, sell-side analysts anticipate that Texas Instruments Incorporated will post 8.48 EPS for the current year.

Texas Instruments Increases Dividend
The company also recently announced a quarterly dividend, which will be paid on Tuesday, November 10th. Investors of record on Friday, October 30th will be given a $1.52 dividend. This is a boost from Texas Instruments’s previous quarterly dividend of $1.42. The ex-dividend date of this dividend is Friday, October 30th. This represents a $6.08 dividend on an annualized basis and a dividend yield of 2.2%. Texas Instruments’s payout ratio is currently 86.45%.

Texas Instruments Profile
(Free Report)

Texas Instruments Incorporated (NASDAQ:TXN) designs and manufactures analog and embedded semiconductor products used in industrial, automotive, personal electronics, communications equipment, and enterprise systems. Its analog products help manage power, sense and measure real-world signals, and support signal processing, while its embedded processing products provide computing and control functions within electronic systems.

The company offers a broad portfolio of semiconductors, including power-management devices, amplifiers, data converters, microcontrollers, processors, and connectivity products.

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Want to see what other hedge funds are holding TXN? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Texas Instruments Incorporated (NASDAQ:TXN – Free Report).

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NorthCrest Asset Manangement LLC grew its position in Texas Instruments Incorporated (NASDAQ:TXN – Free Report) by 19.1% in the third quarter, according to the company in its most recent disclosure with the SEC. The firm owned 15,350 shares of the semiconductor company’s stock after acquiring an additional 2,460 shares during the period. NorthCrest Asset Manangement LLC’s holdings in Texas Instruments were worth $4,424,000 at the end of the most recent quarter.

Several other hedge funds have also modified their holdings of TXN. BlackRock Inc. acquired a new stake in shares of Texas Instruments during the 2nd quarter valued at about $24,607,313,000. Bank of New York Mellon Corp acquired a new position in Texas Instruments in the 2nd quarter worth about $4,488,666,000. Bank of America Corp DE acquired a new position in Texas Instruments in the 2nd quarter worth about $3,700,842,000. Van ECK Associates Corp boosted its position in Texas Instruments by 1.5% during the second quarter. Van ECK Associates Corp now owns 12,149,167 shares of the semiconductor company’s stock worth $3,621,302,000 after purchasing an additional 177,511 shares in the last quarter. Finally, Invesco Ltd. boosted its position in Texas Instruments by 10.6% during the fourth quarter. Invesco Ltd. now owns 18,184,514 shares of the semiconductor company’s stock worth $3,154,831,000 after purchasing an additional 1,749,513 shares in the last quarter. 84.99% of the stock is owned by hedge funds and other institutional investors.

Analyst Ratings Changes Several brokerages have commented on TXN. Mizuho raised their price objective on Texas Instruments from $300.00 to $305.00 and gave the company a “neutral” rating in a report on Thursday, July 23rd. Zacks Research downgraded Texas Instruments from a “strong-buy” rating to a “hold” rating in a research note on Monday, September 21st. Robert W. Baird upped their target price on Texas Instruments from $300.00 to $385.00 and gave the stock an “outperform” rating in a research note on Thursday, July 23rd. KeyCorp increased their target price on Texas Instruments from $390.00 to $400.00 and gave the company an “overweight” rating in a research report on Thursday, July 23rd. Finally, Truist Financial lifted their price target on shares of Texas Instruments from $278.00 to $300.00 and gave the company a “hold” rating in a research note on Thursday, July 23rd. Sixteen analysts have rated the stock with a Buy rating, ten have given a Hold rating and four have issued a Sell rating to the stock. Based on data from MarketBeat.com, the company presently has an average rating of “Hold” and an average target price of $304.26.

View Our Latest Analysis on Texas Instruments Texas Instruments Price Performance NASDAQ:TXN opened at $287.85 on Wednesday. Texas Instruments Incorporated has a 12 month low of $152.73 and a 12 month high of $334.03. The stock has a 50 day moving average of $271.87 and a two-hundred day moving average of $275.18. The company has a current ratio of 4.86, a quick ratio of 3.44 and a debt-to-equity ratio of 0.72. The firm has a market cap of $262.88 billion, a P/E ratio of 43.81, a price-to-earnings-growth ratio of 1.58 and a beta of 1.35.

Texas Instruments (NASDAQ:TXN – Get Free Report) last issued its quarterly earnings results on Wednesday, July 22nd. The semiconductor company reported $2.14 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $1.91 by $0.23. Texas Instruments had a net margin of 31.11% and a return on equity of 35.77%. The company had revenue of $5.46 billion for the quarter, compared to analyst estimates of $5.26 billion. During the same period in the prior year, the firm earned $1.41 earnings per share. The business’s revenue for the quarter was up 22.8% compared to the same quarter last year. Texas Instruments has set its Q3 2026 guidance at 2.230-2.570 EPS. On average, analysts expect that Texas Instruments Incorporated will post 8.45 earnings per share for the current fiscal year.

Texas Instruments Increases Dividend The business also recently disclosed a quarterly dividend, which will be paid on Tuesday, November 10th. Investors of record on Friday, October 30th will be paid a dividend of $1.52 per share. The ex-dividend date of this dividend is Friday, October 30th. This is an increase from Texas Instruments’s previous quarterly dividend of $1.42. This represents a $6.08 dividend on an annualized basis and a dividend yield of 2.1%. Texas Instruments’s dividend payout ratio is 86.45%.

Insider Buying and Selling In other Texas Instruments news, VP Tsedeniya Abraham sold 7,000 shares of the firm’s stock in a transaction dated Thursday, August 27th. The shares were sold at an average price of $264.63, for a total transaction of $1,852,410.00. Following the sale, the vice president directly owned 23,181 shares of the company’s stock, valued at $6,134,388.03. This trade represents a 23.19% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. Corporate insiders own 0.60% of the company’s stock.

Texas Instruments Company Profile (Free Report)

Texas Instruments Incorporated (NASDAQ:TXN) designs and manufactures analog and embedded semiconductor products used in industrial, automotive, personal electronics, communications equipment, and enterprise systems. Its analog products help manage power, sense and measure real-world signals, and support signal processing, while its embedded processing products provide computing and control functions within electronic systems.

The company offers a broad portfolio of semiconductors, including power-management devices, amplifiers, data converters, microcontrollers, processors, and connectivity products.

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Key Takeaways Texas Instruments has gained 66.6% in a year, while Q2'26 revenues rose 23% and non-GAAP EPS climbed 52%.Texas Instruments' data center revenues doubled year over year in Q2'26 and rose 20% sequentially.Texas Instruments plans to make over 95% of wafers internally by 2030, backed by up to $9.5B in incentives. Texas Instruments Incorporated (TXN - Free Report) has been one of the standout performers in the semiconductor industry over the past year. The stock has surged 66.6%, easily beating the broader Zacks Semiconductor – General industry, which advanced 34.6%.

TXN has also outperformed several major semiconductor names, including Broadcom Inc. (AVGO - Free Report) , QUALCOMM Incorporated (QCOM - Free Report) and NVIDIA Corporation (NVDA - Free Report) . Over the past year, shares of Broadcom, QUALCOMM and NVIDIA have risen 7.8%, 9.3% and 29.6%, respectively.

After such a strong rally, investors may wonder whether it is too late to buy Texas Instruments. In our view, the stock still has upside potential. Its valuation is high, but improving earnings, growing AI-related demand, strong cash generation and major manufacturing investments provide a solid foundation for further growth.

Texas Instruments One-year Price Return Performance
Image Source: Zacks Investment Research

Texas Instruments' Strong Results Keep the Bull Case AliveTXN's recent results show that the business is gaining momentum. Second-quarter 2026 revenues increased 23% year over year to $5.46 billion, while non-GAAP earnings rose 52% to $2.14 per share.

The guidance is equally encouraging. Texas Instruments expects third-quarter revenues of $5.65-$6.15 billion, with the midpoint representing about 25% year-over-year growth. The midpoint of its earnings per share guidance is $2.40, implying growth of nearly 62%. The guidance reflects healthy demand across several markets, particularly those tied to AI infrastructure.

Wall Street shares the same optimism. The Zacks Consensus Estimate calls for continued revenue and earnings growth in both 2026 and 2027, reinforcing confidence that the company's growth story is far from over.

Texas Instruments Sales and EPS Growth Forecast
Image Source: Zacks Investment Research

AI Is Becoming a Bigger Opportunity for Texas InstrumentsTexas Instruments is not an AI accelerator company like NVIDIA or AMD, but it is becoming an important beneficiary of the AI boom. TXN makes analog and embedded chips that help manage power, process signals and control equipment used in data centers and industrial systems. As AI data centers become more powerful, they require more electricity and increasingly sophisticated power-management systems.

Instead of competing in the crowded AI processor market, the company is benefiting from the broader AI infrastructure buildout. This positions Texas Instruments to capture AI spending regardless of which GPU (graphics processing unit) maker ultimately dominates the data center market.

The numbers already reflect this trend. Texas Instruments' data center business reached an annual revenue run rate of approximately $1.2 billion in 2025, growing more than 50% year over year. During the second quarter of 2026, data center revenues doubled from the prior-year quarter and increased 20% sequentially.

Such strong growth suggests AI infrastructure could become an increasingly important revenue driver over the coming years. If AI data center investment remains strong, TXN's exposure could expand without requiring the company to compete directly in the highly competitive accelerator market.

Manufacturing Expansion Could Add to TXN’s AdvantageTexas Instruments is also investing heavily to bring more manufacturing in-house. Unlike many semiconductor companies that depend heavily on third-party foundries, TXN plans to produce more than 95% of its wafers internally by 2030.

While this strategy requires substantial capital spending, it could provide greater control over supply and improve cost efficiency. This could become an important competitive advantage as semiconductor demand grows.

Government support should also help reduce the financial burden. Texas Instruments expects to receive up to $1.6 billion in direct CHIPS Act grants and another $6-$8 billion from the U.S. Treasury Department's Investment Tax Credit. Including both, total lifetime benefits are estimated between $7.5 billion and $9.5 billion. These incentives should reduce expansion costs and boost profitability over the long run.

TXN’s Strong Cash Flow Supports More Investment and ReturnsTexas Instruments' cash generation further strengthens its ability to invest while returning capital to shareholders. Over the past 12 months, the company generated $8.67 billion in operating cash flow and $6.53 billion in free cash flow. It ended the second quarter with $7 billion in cash and short-term investments.

The company also continues to reward investors. During the first half of 2026, TXN returned nearly $1.45 billion through dividends and share repurchases. Over the past year, total shareholder returns approached $6 billion.

The strong cash position allows Texas Instruments to invest aggressively in manufacturing expansion while continuing to reward shareholders.

Texas Instruments’ Premium Valuation May Be JustifiedTexas Instruments is not a bargain stock. It currently carries a Value Score of D, reflecting its premium valuation. TXN currently trades at a forward 12-month P/E ratio of 30.99, well above the industry average of 19.04.

Texas Instruments Forward 12-Month P/E Ratio
Image Source: Zacks Investment Research

Compared with other semiconductor leaders, Texas Instruments also trades at a higher earnings multiple than Broadcom, QUALCOMM and NVIDIA. At present, Broadcom, QUALCOMM and NVIDIA are trading at P/E multiples of 19.56, 17.97 and 17.67, respectively.

However, premium valuations are often justified when a company consistently delivers earnings growth, generates strong cash flow and maintains durable competitive advantages.

Texas Instruments fits that profile. The company continues to benefit from expanding AI infrastructure spending, generates substantial free cash flow, maintains a healthy balance sheet and has a long track record of rewarding shareholders through dividends and share buybacks. Those strengths make its premium valuation easier to justify.

Final Verdict: TXN Stock Is Still Worth BuyingTexas Instruments has already delivered an impressive 66.6% gain over the past year, but the investment story is not over.

While the stock is not inexpensive, the underlying business remains strong enough to support the premium. The company's accelerating earnings, strong data center growth, expanding AI exposure and manufacturing investments point to further long-term opportunities. Its strong cash generation also gives it flexibility to invest while continuing to reward shareholders.

Currently, Texas Instruments carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Key Takeaways Texas Instruments says 300mm production costs about 40% less per chip than 200mm wafers.TXN's Q2'26 gross margin rose 350 basis points to 61.4% as gross profit climbed 30% year over year.TXN expects 2026 capex of $2-$3B, down from $4.55B in 2025, as its elevated fab spending cycle ends. Texas Instruments Incorporated (TXN - Free Report) is nearing the payoff phase of its long-term 300mm manufacturing investment, which could provide a structural lift to margins as factory utilization improves. The company claims 300mm production costs about 40% less per chip than production on 200mm wafers. This will give TXN a meaningful cost advantage as more output shifts to larger wafers. Texas Instruments’ six-year elevated capital expenditure cycle for its 300mm wafer fabs will conclude in 2026.

The strategy is already supporting financial performance. In the second quarter of 2026, Texas Instruments reported $5.46 billion in revenues, up 23% year over year, while gross profit increased 30% to $3.35 billion. Gross margin reached 61.4%, up 350 basis points from 57.9% in the year-ago quarter.

Management also credited the benefits of 300mm production as a factor supporting its strong cash generation. The company generated free cash flow of $2.74 billion in the second quarter, up from $1.33 billion in the year-ago quarter. Trailing 12-month free cash flow reached $6.53 billion in the second quarter of 2026, up 271% from $1.76 billion in the year-ago period.

Higher factory utilization could provide another margin boost. As much of TXN’s manufacturing cost is fixed, stronger production spreads those costs over more chips. Management expects to equip its existing clean-room capacity based on customer demand, allowing it to increase output without immediately taking on the full cost of building new facilities.

TXN is entering this phase with lower capital spending requirements. The company expects 2026 capital expenditures of $2-$3 billion, down from $4.55 billion in 2025.

As 300mm capacity ramps up and utilization rises, TXN could benefit from lower unit costs, better operating leverage and stronger free cash flow. However, the pace of margin expansion will depend on demand and how quickly the new facilities reach efficient utilization.

What TXN’s Rivals Are Doing to Improve Manufacturing MarginsTexas Instruments’ major competitors, Analog Devices, Inc. (ADI - Free Report) and ON Semiconductor Corporation (ON - Free Report) , have different strategies to improve manufacturing margins.

Analog Devices is enhancing its manufacturing margins by executing a multi-pronged strategy centered around a hybrid manufacturing model, strategic price increases and optimized asset utilization. With the hybrid manufacturing model, ADI can swiftly pivot production based on demand without incurring heavy capital expenditures. The strategy helps the company protect margins from the fixed-cost burdens of overbuilding factories and supports high free cash flow conversion.

In the third quarter of fiscal 2026, Analog Devices’ revenues increased 40% year-over-year to $4.02 billion, while non-GAAP gross profit jumped 46% to $2.92 billion. Non-GAAP gross margin reached 72.5%, up 330 basis points from 69.2% in the year-ago quarter. Its trailing 12-month free cash flow reached $4.94 billion in the third quarter, up 34% from $3.68 billion in the year-ago period.

ON Semiconductor is taking a more direct approach to manufacturing efficiency through its Fab Right strategy. The company is consolidating its manufacturing footprint and expanding 300mm capacity while exiting less efficient facilities. ON claims that its streamlined fabrication footprint could operate at about 17% lower cost at full utilization.

ON Semiconductor’s non-GAAP gross margin improved 80 basis points sequentially to 39.3% in second-quarter 2026, while manufacturing utilization rose to 83% from 77%. Management expects sequential gross margin expansion through 2026 and guided third-quarter non-GAAP gross margin to 40%-42% on revenues of $1.65-$1.75 billion. The planned Mountain Top and Philippines facility divestitures are expected to generate about $35 million of annualized savings, with benefits beginning in 2027 and fully realized in 2028. Management forecasts these actions represent roughly 50 basis points of the planned 200 basis points of gross margin improvement from Fab Right initiatives.

TXN’s Price Performance, Valuation and EstimatesShares of Texas Instruments have surged 69.4% year to date compared with the Zacks Semiconductor - General industry’s 34.6% growth.

Texas Instruments YTD Price Return Performance
Image Source: Zacks Investment Research

From a valuation standpoint, TXN trades at a forward price-to-earnings ratio of 30.88, significantly higher than the industry’s average of 19.07.

Texas Instruments Forward 12-Month P/E Ratio
Image Source: Zacks Investment Research

The Zacks Consensus Estimate for Texas Instruments’ 2026 and 2027 earnings implies a year-over-year increase of 55.1% and 16.5%, respectively. Estimates for 2026 and 2027 have been revised upward over the past 60 days.

Image Source: Zacks Investment Research

Texas Instruments currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Key Takeaways Texas Instruments' Q2 revenues rose 23% to $5.46B, while EPS jumped 52% to $2.14.Cerebras Systems' core revenues surged 103% to $209.9M, but it posted a $450.5M GAAP net loss.TXN trades at 10.48X forward sales versus 21.40X for CBRS, showing the valuation gap. Texas Instruments Incorporated (TXN - Free Report) and Cerebras Systems Inc. (CBRS - Free Report) give investors exposure to very different semiconductor opportunities. Texas Instruments is a mature chipmaker with a broad analog and embedded-chip portfolio serving industrial, automotive, data center and consumer markets. Cerebras, meanwhile, is a newer AI-focused company that develops wafer-scale processors and solutions designed to handle AI inference workloads.

The contrast between the two companies is especially clear in their latest results. TXN is benefiting from a broad recovery in chip demand while producing strong profits and cash flow. CBRS is growing much faster, but that growth comes with significantly higher execution and profitability risks.

TXN: A Broad Recovery Is Driving GrowthTexas Instruments appears to be entering the second half of 2026 with considerable momentum. Second-quarter 2026 revenues increased 23% year over year to $5.46 billion, helped by strong demand across industrial, automotive and data center markets.

Industrial revenues rose roughly 30%, automotive revenues increased at a mid-teen rate, and data center revenues doubled from the year-ago period as AI infrastructure investment continued to expand. Management also expects demand to remain healthy in the third quarter, suggesting that the recovery is not limited to a single end market.

Texas Instruments is converting that revenue growth into stronger profits. Gross margin increased to 61.4% from 57.9% a year earlier, while operating margin expanded to 42.3% from 35.1%. As a result, second-quarter earnings per share (EPS) jumped 52% year over year to $2.14.

Texas Instruments also benefits from its large 300mm manufacturing footprint. These facilities can lower production costs and strengthen TXN's competitive position as chip volumes recover. Its broad analog portfolio and direct relationships with customers also provide a relatively stable business base.

Cash generation is another major advantage. Texas Instruments generated $6.5 billion in cash over the trailing 12 months and returned $5.8 billion to shareholders through dividends and share repurchases. This gives the company room to invest in capacity while continuing to reward investors.

The third-quarter outlook reinforces the positive trend. At the midpoints of its guidance ranges, revenues are expected to rise about 25% year over year, while EPS is projected to increase roughly 62%.

CBRS: Faster Growth but Much Higher RiskCerebras Systems presents a very different investment story. Its growth is considerably faster, driven by rising demand for AI computing and inference. Second-quarter 2026 core revenues surged 103% year over year to $209.9 million. Core cloud and services revenues were even stronger, jumping 287% to $127.7 million. The company expects full-year 2026 core revenues of $880 million to $890 million.

Cerebras Systems also ended the quarter with $25.4 billion in remaining performance obligations (RPO), which provides substantial potential revenue visibility. Its ability to convert those commitments into actual revenues, however, will depend on execution, manufacturing capacity and data center availability.

The company is rapidly expanding its infrastructure. Cerebras Systems has secured more than 600 megawatts of data center capacity, which is operational or is expected to come online by the end of 2027. Manufacturing capacity is expected to increase more than 10 times during 2026 and expand further in 2027.

Its architecture could also help it avoid some industry bottlenecks because Cerebras Systems does not require high-bandwidth memory, CoWoS packaging or leading-edge 3nm fabrication for its current approach. Partnerships with companies such as OpenAI, AWS and Advanced Micro Devices could further expand its AI footprint.

However, the financial risks are difficult to overlook. Cerebras Systems reported a GAAP net loss of $450.5 million in the second quarter, while its accumulated deficit reached roughly $1.4 billion. The company continues to spend heavily on research and development, cloud infrastructure and data center capacity.

Margins are also under pressure. Core gross margin fell 590 basis points sequentially to 40.6%, partly because Cerebras Systems temporarily rented systems from customers to meet strong inference demand. Management expects third-quarter core gross margin of 38%-40% and core operating margin of negative 25% to negative 23%.

This means CBRS is currently prioritizing expansion over near-term profitability. This strategy could pay off if AI demand remains strong, but it leaves less room for execution mistakes.

Customer concentration adds another layer of risk. Three customers accounted for 34%, 32% and 10% of second-quarter revenues, while a significant portion of the company's RPO is connected to its OpenAI agreement.

Valuation: TXN Offers a More Balanced SetupValuation highlights the different risk profiles of the two stocks.

Cerebras Systems trades at a forward 12-month price-to-sales (P/S) multiple of 21.40 compared with 10.48 for Texas Instruments. CBRS' premium is understandable, given its much faster growth, but investors are also paying more for a business that is still loss-making and heavily dependent on future execution.

Image Source: Zacks Investment Research

Both stocks have also struggled recently. TXN shares have declined 11% over the past three months, while CBRS shares have fallen 8.1%.

Image Source: Zacks Investment Research

The key difference is what investors are getting behind those stock prices and valuations. Texas Instruments already has substantial earnings, cash generation, manufacturing scale and a diversified customer base. Meanwhile, Cerebras Systems’ case suggests that investors need to keep faith in its future growth opportunity.

Conclusion: Texas Instruments Has the EdgeThough both companies currently carry a Zacks Rank #2 (Buy), TXN stock clearly has an edge over CBRS based on the above discussion. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Cerebras has the more aggressive AI growth story. Its rapidly expanding revenues, large RPO, infrastructure investments and partnerships with major technology companies give it significant long-term potential. At the same time, high valuation, large losses, margin pressure and customer concentration make the story more dependent on successful execution.

Texas Instruments offers a more established financial foundation. The company is seeing strong growth across several end markets, expanding margins, generating substantial cash and returning billions of dollars to shareholders. Its lower P/S multiple also provides a more measured valuation framework.

Key Takeaways Texas Instruments' data center revenues doubled year over year and rose about 20% sequentially in Q2'26.TXN expects to outgrow the data center market in 2026, backed by R&D investments and supply capacity.Texas Instruments sees 800-volt architectures boosting analog and embedded chip content in data centers. Texas Instruments Incorporated (TXN - Free Report) is gaining momentum in data center semiconductors as artificial intelligence (AI) infrastructure spending increases. In the second quarter of 2026, TXN’s data center revenues doubled year over year and increased about 20% sequentially. This helped make data center one of the company’s three strongest growth markets, alongside industrial and automotive.

The key question is whether Texas Instruments can maintain such rapid growth through the rest of 2026. Management sees a strong opportunity ahead. CEO Haviv Ilan said during the earnings call that the company expects to outgrow the data center market in 2026, supported by its research and development investments and ability to supply customers. TXN also believes its reliable manufacturing capacity can become a competitive advantage as data center demand expands.

The shift toward higher-voltage power systems could expand the opportunity. The industry is moving toward 800-volt architectures, which can require several power-conversion stages. Texas Instruments expects this transition to increase the amount of analog and embedded content used in data centers, creating more opportunities for its chips.

TXN is also investing to meet the growing demand. During the last earnings call, management stated that the company has clean-room capacity available and plans to equip facilities as needed. This should help it respond quickly if demand remains strong.

Sustaining a 100% growth rate may be difficult as the data center business gets larger. Still, strong AI spending, rising chip content and Texas Instruments’ capacity position suggest this market could remain an important growth engine through 2026 and beyond.

ADI and ON: Can Their Data Center Growth Rival TXN?Analog Devices, Inc. (ADI - Free Report) is a key competitor to Texas Instruments in data center power and signal solutions. In the third quarter of fiscal 2026, ADI’s revenues jumped 40% year over year to $4.02 billion.

Analog Devices’ communications revenues surged 84%, with data center identified as the main growth driver, supported by AI infrastructure spending. ADI also generated $4.9 billion in trailing-12-month free cash flow, giving it room to invest in this opportunity.

ON Semiconductor (ON - Free Report) is another important rival, especially in power semiconductors used in AI data centers. In the second quarter of 2026, the company revealed that its AI data center revenues grew more than 30% sequentially and more than doubled year over year. The company’s total revenues increased 9.2% to $1.6 billion.

AI data center remains ON Semiconductor’s fastest-growing market, and management now expects 2026 revenues to more than double year over year. The company expanded its role in the NVIDIA MGX ecosystem, secured two power-supply platform wins with Great Wall and added design wins supporting AWS power supply and battery backup systems. Management expects AI data center SiC revenues to grow nearly 60% in 2026 as power requirements rise and architectures move toward 800-volt DC distribution. This broadens ON Semiconductor’s opportunity from high-voltage infrastructure through low-voltage power delivery.

Analog Devices shows strong data center momentum, while ON Semiconductor benefits from AI power demand. TXN’s broad analog portfolio and manufacturing capacity could help it remain competitive as AI infrastructure spending expands.

TXN’s Price Performance, Valuation and EstimatesShares of Texas Instruments have rallied 51.9% year to date compared with the Zacks Semiconductor - General industry’s 20.2% growth.

Texas Instruments YTD Price Return Performance
Image Source: Zacks Investment Research

From a valuation standpoint, TXN trades at a forward price-to-earnings ratio of 27.84, significantly higher than the industry’s average of 17.68.

Texas Instruments Forward 12-Month P/E Ratio
Image Source: Zacks Investment Research

The Zacks Consensus Estimate for Texas Instruments’ 2026 and 2027 earnings implies a year-over-year increase of 55.1% and 16.8%, respectively. Estimates for 2026 and 2027 have been revised upward over the past 60 days.

Image Source: Zacks Investment Research

Texas Instruments currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Key Takeaways Texas Instruments began price increases that should contribute from the third quarter and beyond.TXN expects only a small third-quarter pricing lift, with higher unit volumes driving most growth.Texas Instruments posted 23% revenue growth and a 47.8% operating-profit jump in the second quarter. Texas Instruments Incorporated (TXN - Free Report) is beginning to use pricing as an additional lever to improve its financial performance as semiconductor demand strengthens. During the second-quarter 2026 earnings call, management confirmed that the company has started implementing price increases after keeping prices broadly stable during the first half of 2026. The increases are being negotiated directly with customers and are expected to begin contributing in the third quarter and continue in the fourth quarter and beyond.

This is important because semiconductor prices typically decline by a few percentage points each year. Keeping prices flat in the first half already represented a positive shift for TXN. Now, higher prices could provide an additional boost to revenues and margins if customers accept the increases without significantly reducing orders.

However, management expects only a small pricing contribution to third-quarter growth. Most of the expected sequential revenue increase is likely to come from higher unit volumes, meaning pricing is not yet the main growth driver.

Texas Instruments entered this pricing cycle from a position of strength. Second-quarter revenues increased 23% year over year to $5.46 billion, while operating profit jumped 47.8% to $2.31 billion. Analog revenues rose 26%, providing a strong base for potential pricing benefits.

With demand improving across industrial, automotive and data center markets, Texas Instruments appears to have greater pricing power. If price increases expand through 2026, they could support revenue growth and help lift profits further.

What Are Texas Instruments’ Rivals Doing on Pricing?Analog Devices (ADI - Free Report) is a key competitor to Texas Instruments in analog chips and has already shown how pricing can support profitability. In the third quarter of fiscal 2026, Analog Devices’ revenues rose 40% year over year to $4.02 billion, while adjusted gross margin expanded 330 basis points to 72.5%. A favorable mix, higher factory utilization and increased pricing aided third-quarter results.

Earlier in February 2026, Analog Devices increased global prices by an average of 15%. The pricing actions were expected to contribute about 50 basis points of sequential revenue growth in both the fiscal third quarter and fiscal fourth quarter.

ON Semiconductor (ON - Free Report) is another rival that competes with Texas Instruments in power management chips, analog integrated circuits and embedded processing systems, particularly for the automotive and industrial end markets. In April 2026, ON Semiconductor raised prices of selected semiconductor components, focusing heavily on power, industrial and data center segments.

In the second quarter of 2026, ON Semiconductor’s revenues increased 9.2% year over year to $1.604 billion. Non-GAAP gross margin expanded 170 basis points year over year and 80 bps sequentially to 39.3%. Favorable mix and improved manufacturing performance supported the increase, while pricing actions mainly offset higher raw-material and external-manufacturing costs.

TXN’s Price Performance, Valuation and EstimatesShares of Texas Instruments have surged 50.8% year to date compared with the Zacks Semiconductor - General industry’s 28.2% growth.

Texas Instruments YTD Price Return Performance
Image Source: Zacks Investment Research

From a valuation standpoint, TXN trades at a forward price-to-earnings ratio of 27.72, significantly higher than the industry’s average of 19.17.

Texas Instruments Forward 12-Month P/E Ratio
Image Source: Zacks Investment Research

The Zacks Consensus Estimate for Texas Instruments’ 2026 and 2027 earnings implies a year-over-year increase of 55.1% and 16.8%, respectively. Estimates for 2026 and 2027 have been revised upward over the past 60 days.

Image Source: Zacks Investment Research

Texas Instruments currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Key Takeaways Texas Instruments' Q2'26 revenues rose 23%, while non-GAAP EPS jumped 52% year over year.TXN's data center revenues doubled year over year in Q2'26 and increased 20% sequentially.Texas Instruments plans to produce more than 95% of its wafers internally by 2030. Texas Instruments Incorporated (TXN - Free Report) has emerged as one of the better-performing semiconductor stocks this year, but that outperformance comes with a catch — investors are now paying a premium for the company's growth prospects.

Texas Instruments currently trades at around 26.97 times forward 12-month earnings, well above the 20.22 times for the broader Zacks Computer and Technology sector. The stock also carries a Value Score of D, signaling that valuation is clearly stretched.

Texas Instruments Forward 12-Month P/E Ratio
Image Source: Zacks Investment Research

TXN looks expensive compared with several semiconductor companies, including Amtech Systems, Inc. (ASYS - Free Report) , NVIDIA Corporation (NVDA - Free Report) and Analog Devices, Inc. (ADI - Free Report) . Amtech Systems trades at 12.25 times forward 12-month earnings, while NVIDIA and Analog Devices trade at 17.44 times and 22.49 times, respectively.

The premium is harder to ignore after TXN shares have gained 46.8% year to date compared with a 15.5% rise for the sector. Semiconductor peers, Amtech Systems, NVIDIA and Analog Devices, have gained 16.3%, 20.2% and 30.9%, respectively.

Texas Instruments YTD Price Return Performance
Image Source: Zacks Investment Research

Given the sharp rally, investors may question whether the stock has already priced in much of its future growth.

Yet there is a strong argument for staying bullish. Texas Instruments' earnings are accelerating, exposure to AI infrastructure is expanding, and manufacturing investments could strengthen its competitive position. These factors suggest that the company's valuation deserves a closer look rather than being dismissed simply because it is above the sector average.

Strong Financial Results Support TXN’s Premium ValuationTexas Instruments' recent financial performance provides an important reason for investors to accept a higher valuation. Its second-quarter 2026 revenues rose 23% year over year to $5.46 billion, while non-GAAP earnings per share (EPS) jumped 52% to $2.14. The stronger earnings growth is particularly encouraging because it shows that improving demand is translating into meaningful bottom-line gains.

Texas Instruments expects this momentum to continue. Third-quarter revenue guidance of $5.65-$6.15 billion represents roughly 25% year-over-year growth at the midpoint. The midpoint of the EPS guidance, at $2.40, implies nearly 62% year-over-year growth. The guidance reflects healthy demand across several markets, particularly those tied to AI infrastructure.

Wall Street shares the same optimism. The Zacks Consensus Estimate calls for continued revenue and earnings growth in both 2026 and 2027, reinforcing confidence that the company's growth story is far from over.

TXN Sales and EPS Growth Rate Estimates
Image Source: Zacks Investment Research

AI Infrastructure Gives TXN an Attractive Growth OpportunityTexas Instruments is not competing with NVIDIA or AMD in AI accelerators, but it is quietly becoming an important beneficiary of the AI boom. The company supplies analog and embedded chips that perform critical functions inside AI infrastructure.

Its analog and embedded chips manage power, process signals, support connectivity and control equipment used throughout data centers and other industrial systems. As AI servers become more power-hungry, the amount of supporting semiconductor content required also increases.

Instead of competing in the crowded AI processor market, the company is benefiting from the broader AI infrastructure buildout. This positions Texas Instruments to capture AI spending regardless of which GPU (graphics processing unit) maker ultimately dominates the data center market.

The numbers already reflect this trend. Texas Instruments' data center business reached an annual revenue run rate of approximately $1.2 billion in 2025, growing more than 50% year over year. During the second quarter of 2026, data center revenues doubled from the prior-year quarter and increased 20% sequentially.

Such strong growth suggests AI infrastructure could become an increasingly important revenue driver over the coming years. If AI data center investment remains strong, TXN's exposure could expand without requiring the company to compete directly in the highly competitive accelerator market.

Manufacturing Investments Could Strengthen TXN’s MoatTexas Instruments is also investing heavily to bring more manufacturing in-house. Unlike many semiconductor companies that depend heavily on third-party foundries, TXN plans to produce more than 95% of its wafers internally by 2030.

While this strategy requires substantial capital spending, it could provide greater control over supply and improve cost efficiency. That could become an important competitive advantage as semiconductor demand grows.

Government support should also help reduce the financial burden. Texas Instruments expects to receive up to $1.6 billion in direct CHIPS Act grant and another $6-$8 billion from the U.S. Treasury Department's Investment Tax Credit. Including both, total lifetime benefits are estimated between $7.5 billion and $9.5 billion. These incentives should reduce expansion costs and boost profitability over the long run.

TXN’s Strong Cash Flow Adds Support to the Investment CaseTexas Instruments' cash generation further strengthens its ability to invest while returning capital to shareholders. Over the past 12 months, the company generated $8.67 billion in operating cash flow and $6.53 billion in free cash flow. It ended the second quarter with $7 billion in cash and short-term investments.

The company also continues to reward investors. During the first half of 2026, TXN returned nearly $1.45 billion through dividends and share repurchases. Over the past year, total shareholder returns approached $6 billion.

The strong cash position allows Texas Instruments to invest aggressively in manufacturing expansion while continuing to reward shareholders.

Final Thoughts: Is TXN’s Premium Valuation Justified?Premium valuations are often justified when a company consistently delivers earnings growth, generates strong cash flow and maintains durable competitive advantages.

Texas Instruments fits that profile. The company continues to benefit from expanding AI infrastructure spending, delivers consistent earnings growth, generates substantial free cash flow, maintains a healthy balance sheet and has a long track record of rewarding shareholders through dividends and share buybacks. Those strengths make its premium valuation easier to justify.

Currently, Texas Instruments carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Emerald Investment Advisers LLC purchased a new stake in Texas Instruments Incorporated (NASDAQ:TXN – Free Report) during the 2nd quarter, according to the company in its most recent disclosure with the Securities and Exchange Commission. The fund purchased 12,166 shares of the semiconductor company’s stock, valued at approximately $3,626,000.

A number of other large investors have also recently bought and sold shares of TXN. HBW Advisory Services LLC boosted its stake in shares of Texas Instruments by 2.2% in the 1st quarter. HBW Advisory Services LLC now owns 1,730 shares of the semiconductor company’s stock valued at $336,000 after purchasing an additional 37 shares in the last quarter. Montz Harcus Wealth Management LLC increased its position in shares of Texas Instruments by 2.9% during the 1st quarter. Montz Harcus Wealth Management LLC now owns 1,338 shares of the semiconductor company’s stock worth $260,000 after purchasing an additional 38 shares in the last quarter. Livforsakringsbolaget Skandia Omsesidigt increased its position in shares of Texas Instruments by 0.6% during the 1st quarter. Livforsakringsbolaget Skandia Omsesidigt now owns 5,960 shares of the semiconductor company’s stock worth $1,157,000 after purchasing an additional 38 shares in the last quarter. Absher Wealth Management LLC lifted its holdings in Texas Instruments by 1.0% during the 1st quarter. Absher Wealth Management LLC now owns 4,223 shares of the semiconductor company’s stock valued at $820,000 after purchasing an additional 42 shares during the last quarter. Finally, Severin Investments LLC lifted its holdings in Texas Instruments by 3.3% during the 1st quarter. Severin Investments LLC now owns 1,349 shares of the semiconductor company’s stock valued at $262,000 after purchasing an additional 43 shares during the last quarter. 84.99% of the stock is currently owned by institutional investors.

Texas Instruments News Roundup Here are the key news stories impacting Texas Instruments this week:

Positive Sentiment: Operational recovery is accelerating. Texas Instruments’ second-quarter results showed revenue growth of roughly 23%, operating profit up 48%, and net income up 53%. Free cash flow also improved 56% as capital spending nearly halved year over year, suggesting the company’s heavy investment cycle may be easing. Texas Instruments: The $6.5 Billion Cash-Flow Machine Is Finally Awake Positive Sentiment: AI and data-center exposure support the long-term outlook. Analysts and fund commentary characterize TXN as a “picks-and-shovels” beneficiary of AI infrastructure, electric vehicles, industrial automation, and factory equipment because its analog chips help power and control these systems. Texas Instruments Is a Worthy AI Picks-and-Shovels Play I Keep Buying Positive Sentiment: TXN retains broad-based momentum. In comparisons with Analog Devices, coverage points to Texas Instruments’ improving manufacturing utilization and strength across multiple end markets, potentially giving it an edge despite ADI’s stronger industrial and automotive trends. ADI vs. TXN: Which Analog Processing Chip Stock Has an Edge Right Now? Neutral Sentiment: Options-market volatility has risen. Surging implied volatility indicates increased uncertainty and the potential for larger price swings, but it does not establish a clear directional signal. Implied Volatility Surging for Texas Instruments Stock Options Negative Sentiment: Post-earnings performance remains a concern. TXN has decreased 6.8% since its latest quarterly report, with investors apparently looking beyond the earnings beat and focusing on forward estimates, elevated expectations, and whether the recovery can continue. Why Is Texas Instruments Down 6.8% Since Last Earnings Report? Texas Instruments Stock Down 0.5% Shares of NASDAQ TXN opened at $264.36 on Friday. Texas Instruments Incorporated has a 12-month low of $152.73 and a 12-month high of $334.03. The firm’s 50-day simple moving average is $290.51 and its 200 day simple moving average is $258.75. The company has a quick ratio of 3.44, a current ratio of 4.86 and a debt-to-equity ratio of 0.72. The company has a market cap of $241.43 billion, a price-to-earnings ratio of 40.24, a price-to-earnings-growth ratio of 1.04 and a beta of 1.33. Texas Instruments (NASDAQ:TXN – Get Free Report) last posted its quarterly earnings data on Wednesday, July 22nd. The semiconductor company reported $2.14 earnings per share for the quarter, beating the consensus estimate of $1.91 by $0.23. Texas Instruments had a net margin of 31.11% and a return on equity of 35.77%. The firm had revenue of $5.46 billion during the quarter, compared to analysts’ expectations of $5.26 billion. During the same quarter last year, the company posted $1.41 EPS. The company’s quarterly revenue was up 22.8% compared to the same quarter last year. Texas Instruments has set its Q3 2026 guidance at 2.230-2.570 EPS. On average, research analysts expect that Texas Instruments Incorporated will post 8.42 earnings per share for the current fiscal year.

Texas Instruments Announces Dividend The business also recently declared a quarterly dividend, which was paid on Tuesday, August 11th. Stockholders of record on Friday, July 31st were paid a dividend of $1.42 per share. This represents a $5.68 annualized dividend and a dividend yield of 2.1%. The ex-dividend date of this dividend was Friday, July 31st. Texas Instruments’s dividend payout ratio is 86.45%.

Analysts Set New Price Targets Several analysts have weighed in on the stock. Jefferies Financial Group raised shares of Texas Instruments from a “hold” rating to a “buy” rating in a research note on Friday, May 22nd. TD Cowen cut their target price on shares of Texas Instruments from $360.00 to $340.00 and set a “buy” rating for the company in a research note on Thursday, July 23rd. Sanford C. Bernstein boosted their target price on Texas Instruments from $250.00 to $290.00 and gave the stock a “market perform” rating in a report on Thursday, July 23rd. Cantor Fitzgerald reissued a “neutral” rating and issued a $340.00 target price on shares of Texas Instruments in a report on Monday, August 17th. Finally, Susquehanna increased their price target on Texas Instruments from $300.00 to $340.00 and gave the stock a “positive” rating in a research report on Tuesday, July 21st. Two research analysts have rated the stock with a Strong Buy rating, fifteen have assigned a Buy rating, eight have given a Hold rating and four have assigned a Sell rating to the company’s stock. According to data from MarketBeat.com, the company currently has a consensus rating of “Moderate Buy” and a consensus price target of $312.12.

Get Our Latest Report on Texas Instruments

Texas Instruments Company Profile (Free Report)

Texas Instruments Inc (NASDAQ: TXN) is a global semiconductor company headquartered in Dallas, Texas, that designs and manufactures analog and embedded processing chips. The company’s products are used across a wide range of end markets, including industrial, automotive, personal electronics, communications and enterprise equipment. TI’s business emphasizes components that condition, convert, manage and move electrical signals—capabilities that are foundational to modern electronic systems.

TI’s product portfolio includes a broad array of analog integrated circuits—such as power management, amplifiers, data converters and interface devices—as well as embedded processors and microcontrollers used to control systems and run real-time applications.

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It has been about a month since the last earnings report for Texas Instruments (TXN - Free Report) . Shares have lost about 6.8% in that time frame, underperforming the S&P 500.

But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Texas Instruments due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Texas Instruments Q2 Earnings Beat Estimates, Revenues Rise Y/YTexas Instruments reported second-quarter 2026 earnings of $2.14 per share, which increased 52% year over year. The bottom line beat the Zacks Consensus Estimate by 12%.

TXN posted revenues of $5.46 billion, which rose 23% from the year-ago quarter. The top line surpassed the consensus mark by 4.6%, driven by strength in industrial, data center and automotive markets.

TXN’s Segment Mix Highlights Broad-Based GrowthTexas Instruments’ second-quarter results reflected strength across its two core operating segments.

Analog revenues came in at $4.37 billion (79.9% of total revenues), which grew 26% from the year-ago quarter, underscoring improving demand conditions across key end markets. The figure came above our model estimate of $4.08 billion.

Embedded Processing revenues totaled $788 million (14.4% of total revenues), reflecting 16.1% year-over-year growth. The figure missed our model estimate of $799.1 million.

The Other segment generated $310 million of revenues (5.7% of total revenues), which declined 2.2% from the prior-year period. The figure missed our model estimate of $328.5 million.

Texas Instruments Expands Operating LeverageTexas Instruments’ gross profit increased 30% year over year to $3.35 billion. Gross margin of 61.4% expanded 350 basis points (bps) year over year.

Selling, general and administrative (SG&A) expenses increased 1% year over year to $490 million. As a percentage of revenues, SG&A expenses contracted 190 bps year over year to 9%.

Research and development expenses increased 1.5% year over year to $535 million. As a percentage of revenues, it decreased 210 bps year over year to 9.8%.

Operating profit rose 47.8% year over year to $2.31 billion. The operating margin was 42.3%, which expanded 710 bps from the prior-year quarter’s number.

TXN Cash Generation Supports Shareholder ReturnsAs of June 30, 2026, the cash and short-term investment balance was $7 billion, up from $5.1 billion as of March 31, 2026.

At the end of the reported quarter, TXN’s long-term debt was $12.903 billion compared with $12.901 billion in the previous quarter.

Texas Instruments generated an operating cash flow of approximately $2.7 billion in the second quarter. During the second quarter, it repurchased stocks worth $27 million and paid $1.295 billion in dividends.

Texas Instruments Initiates Guidance for Q3 2026Management’s outlook calls for third-quarter 2026 revenues in the range of $5.65-$6.15 billion.

The company expects an effective tax rate of about 13% in the third quarter. Texas Instruments expects earnings per share between $2.23 and $2.57.

How Have Estimates Been Moving Since Then?In the past month, investors have witnessed a upward trend in estimates review.

The consensus estimate has shifted 14.26% due to these changes.

VGM ScoresAt this time, Texas Instruments has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock has a score of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

OutlookEstimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Texas Instruments has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.

Key Takeaways Texas Instruments returned $5.8B to shareholders as trailing 12-month free cash flow climbed to $6.5B.TXN's second-quarter revenues rose 23% year over year, while operating profit surged 48%.TXN expects 2026 capital spending of $2B-$3B, down about 34%-56% from the 2025 level.
Texas Instruments Incorporated (TXN - Free Report) is showing that its improving business momentum is translating into stronger cash generation, raising the question of whether bigger shareholder payouts could follow. The company returned $5.8 billion to shareholders over the past 12 months through dividends and share repurchases.

Texas Instruments’ robust cash flow generation ability is aiding its aggressive shareholder return policy. TXN generated $6.5 billion of free cash flow (FCF) over the trailing 12 months, up sharply from $1.8 billion a year earlier. FCF represented 33.6% of revenues compared with 10.6% in the prior-year period. Operating cash flow also climbed 35% to $8.7 billion.

Improving business conditions should provide further support for share buybacks and dividend payments. Second-quarter revenues jumped 23% year over year to $5.46 billion, while operating profit surged 48%.

A decline in capital expenditure is also anticipated to help Texas Instruments boost shareholders’ returns. Over the past few years, TXN invested aggressively in new 300-millimeter wafer fabrication plants and assembly and test facilities to expand internal manufacturing capacity. In 2025, capital expenditures totaled approximately $4.55 billion.

The spending pace is now easing. In the first half of 2026, Texas Instruments’ capital expenditures were $676 million, significantly down from $1.31 billion in the same period of last year. Management expects 2026 capital expenditures to be between $2 billion and $3 billion, about a 34% to 56% reduction from the 2025 level. This shift could significantly improve the company’s FCF and strengthen its ability to return more capital to shareholders.

Texas Instruments is benefiting from broadening demand across industrial, data center and automotive markets, while its analog and embedded processing franchises support durable long-term growth. With these key growth catalysts, TXN appears increasingly capable of enhancing shareholder returns. The Zacks Consensus Estimate for TXN’s 2026 revenues is pegged at $21.7 billion, indicating a 22.7% year-over-year increase.

TXN’s Rivals With Strong Cash Returns: ADI and ONAnalog Devices, Inc. (ADI - Free Report) is a close rival to Texas Instruments in analog chips and offers a strong shareholder-return profile. During second-quarter 2026 results, Analog Devices revealed that it generated FCF of $4.6 billion in the trailing 12 months, equal to 36% of revenues, and returned $5 billion to shareholders. Analog Devices also maintains a long record of dividend growth, supporting its appeal to income-focused investors.

ON Semiconductor Corporation (ON - Free Report) is another relevant competitor, particularly in power and automotive semiconductors. During second-quarter 2026 results, ON Semiconductor disclosed that it generated $1.5 billion in FCF. The company repurchased $1.5 billion of stock during the period, bringing shareholder returns to roughly 100% of FCF in the trailing 12 months. ON Semiconductor’s AI data-center business is also expected to more than double in 2026, potentially strengthening future cash generation.

TXN’s Price Performance, Valuation and EstimatesShares of Texas Instruments have rallied 59.4% year to date compared with the Zacks Semiconductor - General industry’s 24% growth.

Texas Instruments YTD Price Return Performance
Image Source: Zacks Investment Research

From a valuation standpoint, TXN trades at a forward price-to-earnings ratio of 29.69, significantly higher than the industry’s average of 22.30.

Texas Instruments Forward 12-Month P/E Ratio
Image Source: Zacks Investment Research

The Zacks Consensus Estimate for Texas Instruments’ 2026 and 2027 earnings implies a year-over-year increase of 54.5% and 17.3%, respectively. Estimates for 2026 and 2027 have been revised upward over the past seven days.

Image Source: Zacks Investment Research

Texas Instruments currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Shares of Texas Instruments (TXN -0.58%) are down about 16% after hitting a 52-week high of $334 in June, and the company's second-quarter earnings results didn't provide any lift to the stock.

Investors focused on disappointing guidance rather than the clear advantages the company has in meeting growing data center demand, setting up a compelling buying opportunity.

Image source: Getty Images.

Demand trends point to continued growth Revenue grew 23% year over year, reaching $5.5 billion, while earnings per share jumped 52% to hit $2.14 in the second quarter. Those numbers are strong enough to justify the stock's forward price-to-earnings multiple of 32 at the time of writing.

Strong demand in analog and embedded processing seems to indicate a sustained recovery across the business rather than a temporary growth spurt. Industrial revenue grew 30% year over year, with broad-based demand across geographies and sectors. The company's automotive business also noted a solid mid-teens increase over the year-ago quarter.

The data center market is another reason investors should be bullish on Texas Instruments in the long term. Data center revenue doubled year over year and increased 20% over the previous quarter. CEO Haviv Ilan said, "I think there is more tailwind ahead."

What's more, Texas Instruments could generate even higher revenue, given its additional manufacturing capacity. This will allow Texas Instruments to handle short-lead-time orders that competitors may take longer to fill. This is a clear competitive advantage for the company, allowing it to continue benefiting from growing investment in artificial intelligence (AI) infrastructure.

Today's Change

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Current Price

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275.74

Why the stock fell and is still a buy The company's third-quarter guidance wasn't as strong as investors expected. Analysts expected third-quarter revenue guidance of $5.9 billion. Instead, management guided for revenue to be between $5.65 billion and $6.15 billion. That range leaves room for revenue to come in lower than estimates, which is why the stock is down.

The main reason for the soft revenue guidance is not demand but the impact of price increases. The company has begun raising prices, but management doesn't expect those increases to affect revenue until the fourth quarter.

The stock's sell-off appears to be driven by a focus on short-term issues rather than the company's long-term growth trajectory. Management noted that data center demand is also driving growth for the industrial business, providing a stronger tailwind than perhaps Wall Street realizes.

One reason to like the stock is its above-average dividend yield of about 2.1%. That is attractive for a top semiconductor company, with 22 consecutive years of dividend increases. The dividend is funded entirely by free cash flow, which came in at a healthy $6.5 billion on a trailing-12-month basis.

Analysts also expect earnings to grow by around 23% annually in the coming years. It's rare to find a top tech stock benefiting from the AI build-out that offers both a 2% dividend yield and high-double-digit earnings growth prospects, making Texas Instruments an interesting opportunity for investors.

Posted by Defense World Staff on Jul 23rd, 2026

ABN Amro Investment Solutions grew its position in shares of Texas Instruments Incorporated (NASDAQ:TXN – Free Report) by 10.3% in the first quarter, according to the company in its most recent 13F filing with the SEC. The fund owned 47,988 shares of the semiconductor company’s stock after buying an additional 4,463 shares during the quarter. ABN Amro Investment Solutions’ holdings in Texas Instruments were worth $9,316,000 as of its most recent filing with the SEC.

Several other hedge funds also recently made changes to their positions in the company. Strategic Wealth Investment Group LLC purchased a new stake in Texas Instruments in the 2nd quarter valued at approximately $25,000. Portus Wealth Advisors LLC acquired a new stake in shares of Texas Instruments in the 1st quarter valued at approximately $27,000. High Point Wealth Management LLC purchased a new stake in shares of Texas Instruments in the fourth quarter valued at approximately $25,000. Advocate Investing Services LLC acquired a new position in Texas Instruments during the fourth quarter worth $25,000. Finally, Scarborough Advisors LLC purchased a new position in Texas Instruments in the first quarter worth $29,000. Institutional investors and hedge funds own 84.99% of the company’s stock.

Insider Activity In other Texas Instruments news, VP Mark T. Roberts sold 28,080 shares of the firm’s stock in a transaction dated Thursday, April 30th. The stock was sold at an average price of $280.34, for a total value of $7,871,947.20. Following the sale, the vice president directly owned 53,809 shares of the company’s stock, valued at approximately $15,084,815.06. This trade represents a 34.29% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this hyperlink. Also, VP Mohammad Yunus sold 51,098 shares of Texas Instruments stock in a transaction dated Wednesday, April 29th. The shares were sold at an average price of $270.44, for a total value of $13,818,943.12. Following the completion of the sale, the vice president owned 52,856 shares of the company’s stock, valued at $14,294,376.64. This trade represents a 49.15% decrease in their position. The SEC filing for this sale provides additional information. Insiders sold a total of 303,475 shares of company stock valued at $85,666,638 in the last three months. Company insiders own 0.60% of the company’s stock.

Texas Instruments Stock Up 1.0% TXN stock opened at $294.19 on Thursday. The stock has a market capitalization of $267.74 billion, a P/E ratio of 50.38, a PEG ratio of 1.49 and a beta of 1.32. The company has a debt-to-equity ratio of 0.77, a quick ratio of 2.94 and a current ratio of 4.46. Texas Instruments Incorporated has a one year low of $152.73 and a one year high of $334.03. The company has a 50 day moving average price of $301.99 and a two-hundred day moving average price of $246.39.

Texas Instruments (NASDAQ:TXN – Get Free Report) last issued its quarterly earnings results on Wednesday, July 22nd. The semiconductor company reported $2.14 earnings per share for the quarter, beating the consensus estimate of $1.91 by $0.23. Texas Instruments had a return on equity of 32.49% and a net margin of 29.11%.The company had revenue of $5.46 billion during the quarter, compared to the consensus estimate of $5.26 billion. During the same period in the previous year, the firm posted $1.41 EPS. Texas Instruments’s revenue was up 22.8% on a year-over-year basis. Texas Instruments has set its Q3 2026 guidance at 2.230-2.570 EPS. As a group, sell-side analysts expect that Texas Instruments Incorporated will post 7.69 EPS for the current year.

Texas Instruments Announces Dividend The firm also recently announced a quarterly dividend, which will be paid on Tuesday, August 11th. Investors of record on Friday, July 31st will be given a dividend of $1.42 per share. The ex-dividend date is Friday, July 31st. This represents a $5.68 annualized dividend and a yield of 1.9%. Texas Instruments’s dividend payout ratio is 97.26%.

Key Texas Instruments News Here are the key news stories impacting Texas Instruments this week:

Positive Sentiment: Texas Instruments beat Q2 earnings and revenue estimates, signaling better-than-expected operating performance. Texas Instruments Tops Q2 Earnings and Revenue Estimates Positive Sentiment: Management raised Q3 guidance above Wall Street expectations, which supports the case for an improving demand backdrop in industrial, automotive and AI-related chip markets. Texas Instruments forecasts quarterly revenue above estimates Positive Sentiment: Revenue, profit and EPS all increased year over year, showing a healthier operating trend versus the same quarter last year. Texas Instruments Posts Higher Second-Quarter Profit, Revenue as Sales Increase Neutral Sentiment: Despite the solid report, TXN weakened in after-hours trading as investors likely focused on valuation and whether the improvement is durable. Conference Call and Press Release Wall Street Analyst Weigh In TXN has been the topic of several research reports. Robert W. Baird upped their target price on Texas Instruments from $225.00 to $300.00 and gave the company an “outperform” rating in a report on Thursday, April 23rd. KeyCorp lifted their price target on Texas Instruments from $325.00 to $390.00 and gave the stock an “overweight” rating in a research note on Tuesday, July 14th. JPMorgan Chase & Co. boosted their price objective on shares of Texas Instruments from $227.00 to $280.00 and gave the stock an “overweight” rating in a research report on Thursday, April 23rd. The Goldman Sachs Group increased their price objective on shares of Texas Instruments from $175.00 to $200.00 and gave the company a “sell” rating in a research note on Thursday, April 23rd. Finally, Wolfe Research restated an “outperform” rating and set a $315.00 target price on shares of Texas Instruments in a report on Thursday, April 23rd. Thirteen investment analysts have rated the stock with a Buy rating, ten have given a Hold rating and four have given a Sell rating to the company. According to MarketBeat.com, the stock currently has a consensus rating of “Hold” and a consensus price target of $290.75.

Read Our Latest Research Report on Texas Instruments

Texas Instruments Profile (Free Report)

Texas Instruments Inc (NASDAQ: TXN) is a global semiconductor company headquartered in Dallas, Texas, that designs and manufactures analog and embedded processing chips. The company’s products are used across a wide range of end markets, including industrial, automotive, personal electronics, communications and enterprise equipment. TI’s business emphasizes components that condition, convert, manage and move electrical signals—capabilities that are foundational to modern electronic systems.

TI’s product portfolio includes a broad array of analog integrated circuits—such as power management, amplifiers, data converters and interface devices—as well as embedded processors and microcontrollers used to control systems and run real-time applications.

Featured Articles Five stocks we like better than Texas Instruments Could Truth API Become Trump Media’s First Meaningful Revenue Driver? Small Caps Are Crushing the S&P 500—3 Stocks Still Worth Buying Moog Is More Than a Missile Maker, and Wall Street Is Noticing A Boring Dividend Growth Strategy Becomes a Solid Defensive Play Want to see what other hedge funds are holding TXN? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Texas Instruments Incorporated (NASDAQ:TXN – Free Report).

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Texas Instruments Incorporated (NASDAQ:TXN) will release its second quarter earnings report after the closing bell on Wednesday, July 22.

Analysts expect the Dallas, Texas-based company to report quarterly earnings of $1.92 per share, up from $1.41 per share in the year-ago period. The consensus estimate for Texas Instruments’ quarterly revenue is $5.24 billion. It reported $4.45 billion last year, according to Benzinga Pro.

On July 16, the company’s board of directors declared a quarterly cash dividend of $1.42 per share.

Texas Instruments shares rose 2.6% to close at $291.30 on Tuesday.

Benzinga readers can access the latest analyst ratings on the Analyst Stock Ratings page. Readers can sort by stock ticker, company name, analyst firm, rating change or other variables.

Let’s have a look at how Benzinga’s most-accurate analysts have rated the company in the recent period.

Considering buying TXN stock? Here’s what analysts think:

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Resources Investor Relations Journalists Agencies Client Login Send a Release News Products Contact , /PRNewswire/ -- The board of directors of Texas Instruments Incorporated (Nasdaq: TXN) today declared a quarterly cash dividend of $1.42 per share of common stock, payable August 11, 2026, to stockholders of record on July 31, 2026.   

About Texas Instruments

Texas Instruments Incorporated (Nasdaq: TXN) is a global semiconductor company that designs, manufactures and sells analog and embedded processing chips for markets such as industrial, automotive, data center, personal electronics and communications equipment. At our core, we have a passion to create a better world by making electronics more affordable through semiconductors. This passion is alive today as each generation of innovation builds upon the last to make our technology more reliable, more affordable and lower power, making it possible for semiconductors to go into electronics everywhere. Learn more at TI.com.

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Texas Instruments (TXN - Free Report) is expected to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended June 2026. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price.

The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on July 22. On the other hand, if they miss, the stock may move lower.

While management's discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations, it's worth having a handicapping insight into the odds of a positive EPS surprise.

Zacks Consensus EstimateThis chipmaker is expected to post quarterly earnings of $1.91 per share in its upcoming report, which represents a year-over-year change of +35.5%.

Revenues are expected to be $5.22 billion, up 17.4% from the year-ago quarter.

Estimate Revisions TrendThe consensus EPS estimate for the quarter has been revised 0.88% higher over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.

Investors should keep in mind that an aggregate change may not always reflect the direction of estimate revisions by each of the covering analysts.

Price, Consensus and EPS Surprise

Earnings WhisperEstimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. Our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction) -- has this insight at its core.

The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.

Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only.

A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP.

Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell).

How Have the Numbers Shaped Up for Texas Instruments?For Texas Instruments, the Most Accurate Estimate is higher than the Zacks Consensus Estimate, suggesting that analysts have recently become bullish on the company's earnings prospects. This has resulted in an Earnings ESP of +2.66%.

On the other hand, the stock currently carries a Zacks Rank of #3.

So, this combination indicates that Texas Instruments will most likely beat the consensus EPS estimate.

Does Earnings Surprise History Hold Any Clue?While calculating estimates for a company's future earnings, analysts often consider to what extent it has been able to match past consensus estimates. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number.

For the last reported quarter, it was expected that Texas Instruments would post earnings of $1.37 per share when it actually produced earnings of $1.68, delivering a surprise of +22.63%.

Over the last four quarters, the company has beaten consensus EPS estimates three times.

Bottom LineAn earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss.

That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.

Texas Instruments appears a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

Key Takeaways TXN shares rallied 51.9% in three months, outpacing the semiconductor industry and major peers.Texas Instruments benefits from AI infrastructure demand through analog and embedded chips.TXN generated $4.35B in free cash flow and returned nearly $1.45B in the first quarter of 2026. Texas Instruments Incorporated (TXN - Free Report) shares have rallied 51.9% over the past three months, making the company one of the biggest winners in the semiconductor space. The stock has comfortably outperformed the broader Zacks Semiconductor – General industry’s 23.7% gain.

The rally has also outpaced major peers, including QUALCOMM Incorporated (QCOM - Free Report) , Broadcom Inc. (AVGO - Free Report) and NVIDIA Corporation (NVDA - Free Report) . Over the past three months, shares of QUALCOMM, Broadcom and NVIDIA have risen 43.2%, 17.2% and 11.1%, respectively.

While such a massive rally may prompt some investors to book profits and exit the investment, Texas Instruments' strong fundamentals suggest there could still be room for upside. The company remains one of the clearest beneficiaries of the artificial intelligence (AI) infrastructure boom, and demand trends continue to work heavily in its favor.

Texas Instruments 3-Month Price Return Performance
Image Source: Zacks Investment Research

AI Is Helping Texas Instruments Even Without AI GPUsUnlike NVIDIA or AMD, Texas Instruments does not build AI accelerators. Instead, it supplies the analog and embedded chips that keep AI infrastructure running.

Its products manage power, convert signals, control motors, regulate cooling systems and enable connectivity across data centers, industrial equipment and automotive applications. These components may receive less attention than AI processors, but they are essential as AI servers become more power-hungry and increasingly complex.

Every new AI data center requires far more power management and sensing components than traditional computing infrastructure. This is creating a meaningful opportunity for Texas Instruments.

Rather than competing in the crowded AI processor market, the company is benefiting from the broader AI infrastructure buildout — a trend that could prove more durable over time.

The company's data center business reached an annual revenue run rate of roughly $1.2 billion in 2025, growing more than 50% year over year. In the first quarter of 2026, data center revenues jumped 90% from the prior-year period and increased 25% sequentially. These growth rates highlight the company’s growing importance in AI infrastructure and suggest that this market could remain a major contributor for years.

TXN’s Financial Performance Continues to ImproveTexas Instruments is also executing well financially. First-quarter 2026 revenues increased 18.6% year over year, while non-GAAP earnings per share climbed 31.3%, showing that demand is improving across several end markets.

Management’s outlook for the second quarter suggests that this momentum is far from over. Texas Instruments expects revenues between $5 billion and $5.4 billion, representing year-over-year growth of 12-21%. The projected earnings range of $1.77-$2.05 per share implies growth of 25-45%, reflecting continued strength across key markets, particularly those benefiting from AI-driven investments.

The Zacks Consensus Estimate for 2026 and 2027 also points to continued expansion in both revenue and earnings, reinforcing confidence in the company’s growth trajectory.

Image Source: Zacks Investment Research

TXN Eyes Competitive Lead Through Internal ManufacturingTexas Instruments is also taking a different approach to manufacturing than many semiconductor companies. Instead of relying heavily on external foundries, management plans to manufacture more than 95% of its wafers internally by 2030.

This strategy requires significant investment today but offers several long-term advantages. Greater manufacturing control can improve supply-chain reliability, reduce production costs over time and protect margins during industry shortages.

Government incentives further strengthen this strategy. Texas Instruments expects up to $1.6 billion in CHIPS Act funding, with total lifetime benefits estimated between $7.5 billion and $9.5 billion. These incentives should lower expansion costs while supporting future profitability.

TXN’s Strong Cash Generation Supports Shareholder ReturnsAnother reason investors continue to favor Texas Instruments is its ability to generate cash. Over the last 12 months, the company produced $7.8 billion in operating cash flow and $4.35 billion in free cash flow. It also ended the first quarter with $5.1 billion in cash and short-term investments. This financial strength allows management to invest in new manufacturing capacity while continuing to reward shareholders.

During the first quarter alone, Texas Instruments returned nearly $1.45 billion through dividends and share repurchases. Over the past year, total shareholder returns approached $6 billion. Few semiconductor companies combine growth investments with such consistent capital returns.

Should Investors Be Worried About TXN’s Premium Valuation?From a valuation standpoint, Texas Instruments is not cheap. The company currently carries a Zacks Value Score of D, indicating that the stock trades at a premium relative to traditional valuation metrics.

TXN currently trades at a forward 12-month P/E ratio of 36.31, well above the industry average of 23.32. Compared with other semiconductor leaders, Texas Instruments also trades at a higher earnings multiple than Broadcom, NVIDIA and QUALCOMM. At present, Broadcom, NVIDIA and QUALCOMM are trading at P/E multiples of 22.16, 19.19 and 16.74, respectively.

Texas Instruments Forward 12-Month P/E Ratio
Image Source: Zacks Investment Research

However, premium valuations are often justified when companies combine durable growth, strong profitability and consistent cash generation. Texas Instruments checks many of these boxes. The company continues to benefit from expanding AI-related demand, generates substantial free cash flow, maintains a strong balance sheet and consistently returns cash to shareholders through dividends and buybacks.

Final Thoughts: Buy More TXN SharesTexas Instruments' recent rally appears to be supported by improving fundamentals rather than market enthusiasm alone. The company is benefiting from rising AI infrastructure spending, rapidly expanding data center demand and a manufacturing strategy that should strengthen its competitive position over time.

Although the stock trades at a premium valuation, that premium appears justified, given its consistent earnings growth, robust cash flows and shareholder-friendly approach. With AI infrastructure spending still in the early stages of a multi-year expansion cycle, Texas Instruments looks well-positioned to deliver steady growth for years to come.

Currently, Texas Instruments carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Key Takeaways AI infrastructure spending is driving demand for advanced chips, memory and manufacturing services.Micron has sold out 2026 HBM supply, with much of 2027 output committed under customer deals.FormFactor, Texas Instruments and Taiwan Semiconductor benefit from rising AI chip complexity. Artificial intelligence (AI) has become one of the biggest investment themes in the technology sector, and the rapid rise in AI infrastructure spending is creating major opportunities for semiconductor companies. Large cloud providers and hyperscalers are investing heavily to expand their AI capabilities, which is driving demand for advanced chips, memory solutions and semiconductor manufacturing services.

Amazon, Microsoft, Alphabet and Meta Platforms are expected to spend around $700 billion in capital expenditures in 2026. The majority of that spending is expected to go toward AI infrastructure, including data centers, networking equipment, advanced processors and memory solutions. This wave of investment is creating a strong demand environment for companies that supply the semiconductor industry.

According to Gartner, worldwide AI-related spending is expected to increase 47% and reach $2.59 trillion in 2026. The expansion is not limited to cloud companies. Enterprises across industries are deploying AI applications, which require powerful processors, high-bandwidth memory (HBM), advanced packaging and sophisticated semiconductor equipment.

As AI workloads become larger and more complex, chipmakers are becoming some of the biggest beneficiaries of this spending cycle. Companies that provide memory products, chip manufacturing services, testing solutions and analog semiconductors are seeing growing opportunities. Investors looking to benefit from the AI capex boom should consider semiconductor companies that have strong technology positions and long-term growth drivers.

Micron Technology, Inc. (MU - Free Report) , FormFactor, Inc. (FORM - Free Report) , Texas Instruments Incorporated (TXN - Free Report) and Taiwan Semiconductor Manufacturing Company (TSM - Free Report) are four such semiconductor stocks that appear well-positioned to benefit from the ongoing AI capex boom. These stocks have a favorable combination of a Growth Score of A or B and a Zacks Rank #1 (Strong Buy) or #2 (Buy), offering solid investment opportunities.

Micron Technology: AI Memory Demand Drives GrowthMicron Technology is one of the leading suppliers of DRAM and NAND memory and has emerged as a key player in the HBM market. HBM is critical for AI accelerators because it enables faster data processing and improves performance in large language models and generative AI applications.

The strength of this demand is evident in Micron Technology’s order book. The company has already sold out its HBM supply for the calendar year 2026, while a significant portion of 2027 production is already committed through long-term customer agreements.

This favorable supply-demand environment is supporting higher pricing and stronger margins. Beyond HBM, demand for conventional DRAM used in AI servers continues to rise. As hyperscalers expand AI data centers and enterprises deploy advanced AI workloads, Micron Technology remains one of the most direct beneficiaries of the growing AI memory market.

In the third quarter of fiscal 2026, MU’s revenues surged 346% year over year, while non-GAAP earnings per share (EPS) jumped 1,200%. The Zacks Consensus Estimate for fiscal 2026 revenues and EPS suggests a year-over-year increase of approximately 225% and 675%, respectively. The consensus mark for fiscal 2026 earnings has been revised upward over the past seven days.

Currently, Micron Technology sports a Zacks Rank #1 and has a Growth Score of A. You can see the complete list of today’s Zacks #1 Rank stocks here.

FormFactor: Benefiting From Advanced Chip Testing DemandFormFactor is an important supplier of semiconductor testing and measurement solutions. Its products play a critical role in the development and production of advanced semiconductors. AI processors and memory products have become increasingly complex, requiring extensive testing to ensure performance and reliability. FormFactor’s probe cards and engineering systems help semiconductor companies validate advanced chips before commercial production.

The growing adoption of HBM and advanced packaging technologies is creating additional opportunities for the company. AI chips often combine multiple components within a single package, increasing testing requirements throughout the manufacturing process.

FormFactor serves many leading semiconductor and memory manufacturers, allowing it to benefit directly from rising AI investments. As advanced chip production expands, the demand for testing solutions is expected to remain strong. With AI applications requiring more sophisticated semiconductors, FormFactor appears well-positioned to benefit from the increasing complexity of chip manufacturing.

In the first quarter of 2026, FormFactor’s revenues and adjusted EPS increased 32% and 143%, respectively, on a year-over-year basis. The Zacks Consensus Estimate for 2026 revenues and EPS suggests a year-over-year jump of 22% and 85%, respectively. The consensus mark for 2026 earnings has been revised upward over the past 60 days.

FormFactor sports a Zacks Rank #1 and has a Growth Score of B at present.

Texas Instruments: Analog Leadership to Aid Long-Term GrowthTexas Instruments is seeing rising momentum in the data center market, which has become an important growth driver for the company. It does not compete directly in high-end AI graphics processors. Instead, it supplies analog and embedded chips that are essential for data center infrastructure. These chips help manage power delivery, battery backup systems, cooling equipment, motor controls, signal conversion and server connectivity. As modern data centers become larger and more power-intensive, the need for efficient power management solutions increases.

In 2025, Texas Instruments’ data center business reached an annual run rate of about $1.2 billion, growing more than 50% year over year. In the first quarter of 2026, revenues from the data center end market surged 90% year over year and 25% sequentially. As cloud and AI workloads continue to rise, Texas Instruments’ strong portfolio and manufacturing scale position it well to benefit from sustained demand for efficient, high-performance power solutions in data center infrastructure.

One of TXN’s biggest strengths is its manufacturing advantage. The company continues expanding its 300-millimeter wafer capacity, which supports lower production costs and stronger margins over time. In the first quarter of 2026, non-GAAP gross margin expanded 120 basis points (bps) year over year to 58%, while non-GAAP operating margin improved 490 bps to 37.5%.

In the first quarter, Texas Instruments’ revenues and non-GAAP EPS increased approximately 19% and 31%, respectively, on a year-over-year basis. The Zacks Consensus Estimate for 2026 revenues and EPS suggests a year-over-year rise of 17% and 41%, respectively. The consensus mark for 2026 earnings has been revised upward over the past 60 days.

Currently, Texas Instruments carries a Zacks Rank #2 and has a Growth Score of B.

Taiwan Semiconductor: The Backbone of AI Chip ManufacturingTaiwan Semiconductor, also known as TSMC, stands at the center of the AI revolution. The company is the world’s largest contract chip manufacturer and produces advanced chips for many leading technology companies.

AI chip designers depend heavily on TSMC’s advanced manufacturing technologies. The company’s leading-edge 3-nanometer and 5-nanometer processes are widely used for high-performance computing and AI applications. Taiwan Semiconductor’s advanced packaging technologies have also become increasingly important for AI processors.

High-performance computing has become one of TSMC’s largest revenue drivers. Strong demand from AI customers continues to support capacity utilization and revenue growth. Major technology companies, including NVIDIA, Broadcom, Advanced Micro Devices and QUALCOMM, rely on Taiwan Semiconductor to manufacture their most advanced chips.

In the first quarter of 2026, Taiwan Semiconductor’s revenues in U.S. dollars surged approximately 41% year over year, while EPS jumped 65%. The Zacks Consensus Estimate for 2026 revenues and EPS suggests a year-over-year increase of 32% and 44%, respectively. The consensus mark for 2026 earnings has been revised upward over the past seven days.

Taiwan Semiconductor carries a Zacks Rank #2 and has a Growth Score of B at present.