Texas Instruments (TXN) AI Stock Analysis

• Market Cap: $173.70B
• Dividend Yield: 3.11%
• Average Volume (3M): 7.68M
• Price to Earnings (P/E): 31.5
• Beta (1Y): 1.15
• Revenue Growth: 9.90%
• EPS Growth: 1.65%
• Country: US
• Employees: 34,000
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): 1.27
• Shares Outstanding: 907,550,800
• 10 Day Avg. Volume: 6,997,424
• 30 Day Avg. Volume: 7,680,141
• PEG Ratio: 7.87
• Price to Book (P/B): 9.69
• Price to Sales (P/S): 8.92
• P/FCF Ratio: 60.58
• Enterprise Value/Market Cap: 1.07
• Enterprise Value/Revenue: 10.51
• Enterprise Value/Gross Profit: 18.43
• Enterprise Value/Ebitda: 22.52
• 1Y Price Target: $222.63
• Price Target Upside: 16.69% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 25
• EPS Forecast (FY): 6.43
• Revenue Forecast (FY): $19.57B

• Rating: 70 Outperform
• Price Target: $210.00 ▲(10.07% Upside)
• Action: Reiterated Date: 01/29/26
• Date: Action: Reiterated 01/29/26

TXN scores well on business quality and earnings/cash-generation trends, reinforced by a cautiously positive outlook and improving free cash flow dynamics as CapEx moderates. The score is held back by weak free-cash-flow conversion versus net income, increased leverage, and a technically overbought setup alongside a high P/E valuation.

Positive Factors

High profitability & cash generation

Sustained high gross and net margins, alongside operating cash flow that covers net income ~2.26x, indicate durable pricing power and strong cash-earnings quality. This supports multi-year investment, dividends and buybacks, and provides shock-absorbing capacity through semiconductor cycles.

Diversified end-market scale

Revenue concentration in industrial, automotive and expanding data center demand creates a broad, less cyclical revenue base. Large, recurring OEM relationships and long product lifecycles across these end markets reduce volatility and support predictable multi-quarter to multi-year demand visibility.

Manufacturing scale & policy tailwinds

Execution on internal fabs and 300mm capacity gives a durable cost and supply advantage versus pure-play fabless peers. Declining near-term CapEx and CHIPS/ITC funding improve future free cash flow economics and reinforce long-term competitive moat via controlled capacity and lower unit costs.

Negative Factors

Rising leverage

Higher leverage reduces balance-sheet flexibility in a cyclical industry; $14B of debt increases exposure to interest-cost variability and limits optionality for opportunistic M&A or materially larger buybacks if end-market weakness recurs, making capital allocation more constrained.

Weak free-cash-flow conversion

Lower FCF conversion versus net income implies earnings are not translating to distributable cash at prior levels, likely due to capex and working-capital absorption. This limits durable capacity to accelerate buybacks or sustain higher dividend growth if capex or inventory needs persist.

Margin compression vs prior peaks

Material margin erosion from peak levels signals structural pressure from product mix shifts, loadings and competitive dynamics. Sustained lower margins would reduce internal cash generation and the margin buffer against cyclical demand declines, increasing sensitivity to pricing and volume swings.

Texas Instruments Business Overview & Revenue Model

Company Description

Texas Instruments Incorporated designs, manufactures, and sells semiconductors to electronics designers and manufacturers worldwide. It operates in two segments, Analog and Embedded Processing. The Analog segment offers power products to manage power requirements in various levels using battery-management solutions, DC/DC switching regulators, AC/DC and isolated controllers and converters, power switches, linear regulators, voltage supervisors, voltage references, and lighting products. This segment also provides signal chain products that sense, condition, and measure signals to allow information to be transferred or converted for further processing and control for use in end markets, including amplifiers, data converters, interface products, motor drives, clocks, and sensing products. The Embedded Processing segment offers microcontrollers that are used in electronic equipment; digital signal processors for mathematical computations; and applications processors for specific computing activity. This segment offers products for use in various markets, such as industrial, automotive, personal electronics, communications equipment, enterprise systems, and calculators and other. The company also provides DLP products primarily for use in projectors to create high-definition images; calculators; and application-specific integrated circuits. It markets and sells its semiconductor products through direct sales and distributors, as well as through its website. Texas Instruments Incorporated was founded in 1930 and is headquartered in Dallas, Texas.

How the Company Makes Money

Texas Instruments primarily makes money by selling semiconductors, with revenue concentrated in two main product lines: (1) Analog semiconductors (e.g., power management and signal chain devices) and (2) Embedded Processing products (e.g., microcontrollers and related processors). It also generates a smaller portion of revenue from its Other segment (which historically includes items such as DLP technology and certain custom or legacy businesses). TXN monetizes its portfolio by shipping high-volume standard products used across many end applications, typically selling into customers’ production bills of materials rather than one-off projects. Sales are executed through two primary routes to market: direct sales to large original equipment manufacturers (OEMs) and sales through third-party distributors that provide inventory, logistics, and customer reach—especially for smaller customers and long-tail demand. A key economic driver is the breadth and longevity of its analog and embedded products: many devices remain in production for years, supporting recurring demand tied to customers’ product lifecycles. Profitability and cash generation are influenced by factors such as product mix (analog vs. embedded), scale and utilization of internal manufacturing (including wafer fabrication and assembly/test operations), pricing discipline, and demand trends in industrial and automotive markets. Specific partnership details that are not publicly enumerated at a company-wide level are null.

Texas Instruments Financial Statement Overview

Summary

Strong underlying profitability (TTM gross margin ~57%, net margin ~28%) and high-quality operating cash flow (OCF covers net income ~2.26x) support the score. Offsetting this, margins remain well below 2021–2022 peaks, leverage has risen (debt-to-equity ~0.86), and free-cash-flow conversion is the key constraint (TTM FCF only ~36% of net income).

Income Statement

Profitability remains a clear strength: TTM (Trailing-Twelve-Months) gross margin is ~57% and net margin is ~28%, still strong for the industry. However, the earnings profile has softened versus the 2021–2023 peak as margins compressed materially (net margin fell from ~44% in 2022 / ~37% in 2023 to ~28% in TTM). Revenue has stabilized and returned to growth in TTM (+2.4%) after declines in 2023 and 2024, but overall results are still in a recovery phase rather than a fresh expansion cycle.

Balance Sheet

The balance sheet is solid with meaningful equity ($16.3B in TTM) and strong shareholder returns (TTM return on equity ~30%). Leverage is moderate-to-elevated for a cyclical semiconductor name: debt-to-equity is ~0.86 in TTM, up from ~0.60–0.66 in 2021–2023, reducing financial flexibility compared with prior years. Total assets have remained broadly stable, but the trend toward higher leverage is the main watch item.

Cash Flow

Cash generation is healthy at the operating level (TTM operating cash flow $7.15B), and operating cash flow covers net income well (TTM ~2.26x), signaling strong cash earnings quality. The key weakness is conversion to free cash flow: TTM free cash flow is $2.60B and only ~36% of net income, which is much lower than 2020–2022 when free cash flow tracked a far larger share of profits. Free cash flow growth is strong in TTM (+25%), but off a depressed base, suggesting improvement while capex or working-capital demands remain a drag.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	17.68B	15.64B	17.52B	20.03B	18.34B
Gross Profit	10.08B	9.09B	11.02B	13.77B	12.38B
EBITDA	8.25B	7.54B	9.01B	11.22B	10.06B
Net Income	5.00B	4.80B	6.51B	8.75B	7.77B
Balance Sheet
Total Assets	34.59B	35.51B	32.35B	27.21B	24.68B
Cash, Cash Equivalents and Short-Term Investments	4.88B	7.58B	8.57B	9.07B	9.74B
Total Debt	15.39B	15.04B	12.27B	9.50B	8.21B
Total Liabilities	18.31B	18.61B	15.45B	12.63B	11.34B
Stockholders Equity	16.27B	16.90B	16.90B	14.58B	13.33B
Cash Flow
Free Cash Flow	2.60B	1.50B	1.35B	5.92B	6.29B
Operating Cash Flow	7.15B	6.32B	6.42B	8.72B	8.76B
Investing Cash Flow	-1.44B	-3.20B	-4.36B	-3.58B	-4.09B
Financing Cash Flow	-5.69B	-2.88B	-2.14B	-6.72B	-3.14B

Texas Instruments Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 190.78
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TXN, the sentiment is Negative. The current price of 190.78 is below the 20-day moving average (MA) of 208.20, below the 50-day MA of 203.99, and above the 200-day MA of 187.97, indicating a neutral trend. The MACD of -4.55 indicates Positive momentum. The RSI at 32.87 is Neutral, neither overbought nor oversold. The STOCH value of 15.79 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TXN.

Texas Instruments Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MU	77 Outperform	$479.61B	12.36	22.43%	0.20%	45.43%	203.31%
ADI	73 Outperform	$149.42B	45.73	7.92%	1.43%	16.89%	39.29%
ARM	71 Outperform	$122.93B	130.14	11.03%	―	24.81%	27.33%
TXN	70 Outperform	$173.70B	31.53	30.44%	3.11%	9.90%	1.65%
QCOM	64 Neutral	$138.52B	15.44	21.63%	2.01%	13.66%	-45.40%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
INTC	48 Neutral	$228.62B	-658.38	-0.26%	―	-1.49%	―

Texas Instruments Corporate Events

Texas Instruments Adopts New Delaware-Focused Forum Selection Bylaw

On February 3, 2026, Texas Instruments’ Board of Directors approved amendments to the company’s By-Laws to introduce a forum selection provision that centralizes the handling of specific legal disputes. Under the new rules, certain state corporate law and shareholder derivative claims must be brought exclusively in the Delaware Court of Chancery (or, if that court lacks jurisdiction, the U.S. District Court for the District of Delaware), while any claims arising under the Securities Act of 1933 must be filed solely in U.S. federal district courts, a move that is likely aimed at reducing litigation uncertainty and consolidating shareholder and securities-related disputes into designated courts.

The most recent analyst rating on (TXN) stock is a Buy with a $270.00 price target. To see the full list of analyst forecasts on Texas Instruments stock, see the TXN Stock Forecast page.