Texas Instruments: Early-Cycle Recovery, Data Center Momentum, and Valuation Upside Support Outperform Rating

In a report released today, Tristan Gerra from Robert W. Baird reiterated a Buy rating on Texas Instruments, with a price target of $225.00.

Tristan Gerra has given his Buy rating due to a combination of factors tied to Texas Instruments’ positioning in an early-stage upcycle and its improving fundamentals. He highlights that the company’s first-quarter outlook is stronger than normal seasonal patterns, supported primarily by a rebound in industrial demand and robust data center growth, which has become a meaningful share of total revenue. Texas Instruments’ largely direct customer model and absence of long‑term supply agreements coming out of the prior downturn should allow it to capture recovering unit demand more efficiently, while pricing remains a modest headwind but not the main driver of performance. He also notes that current valuation still sits below the stock’s historical peak multiples, leaving scope for multiple expansion as earnings recover.

In addition, Gerra points out that data center momentum, particularly in power and signal‑chain analog solutions, positions Texas Instruments to benefit from ongoing capital spending in that segment. Industrial end markets, which grew strongly in the latest quarter, are expected to continue underpinning the recovery, while automotive weakness appears seasonal rather than structural, with long‑term content trends intact. The company’s capital spending plan remains disciplined, and lower‑than‑previously-expected depreciation supports the earnings outlook. Taken together, these elements justify his Outperform rating and a $225 price target, reflecting confidence that both earnings and the valuation multiple can move higher as the cycle plays out.

In another report released today, TipRanks – xAI also upgraded the stock to a Buy with a $225.00 price target.