Texas Instruments (TXN) AI Stock Analysis

• Market Cap: $170.27B
• Dividend Yield: 2.89%
• Average Volume (3M): 6.43M
• Price to Earnings (P/E): 34.2
• Beta (1Y): 1.17
• Revenue Growth: 3.62%
• EPS Growth: -5.27%
• Country: US
• Employees: 34,000
• Sector: Technology
• Sector Strength: 84
• Industry: Semiconductors
• EPS (TTM): 1.41
• Shares Outstanding: 909,137,150
• 10 Day Avg. Volume: 5,976,597
• 30 Day Avg. Volume: 6,430,603
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.16
• Enterprise Value/Revenue: 11.88
• Enterprise Value/Gross Profit: 20.47
• Enterprise Value/Ebitda: 24.91
• 1Y Price Target: $213.04
• Price Target Upside: 13.36% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 28

• Rating: 75 Outperform
• Price Target: $220.00 ▲(17.06% Upside)

Texas Instruments' overall stock score reflects its strong financial performance and solid earnings call results, which are slightly offset by high valuation concerns and technical indicators suggesting potential short-term weakness. The company's strategic focus on manufacturing and technology investments indicates resilience and long-term growth potential, despite geopolitical uncertainties and automotive market challenges.

Positive Factors

Cash Flow

Cash flow will improve meaningfully as they come to the end of their capex cycle, representing a structural improvement in cash flow that will persist for many years.

Financial Performance

The prospect of improved demand provides a good setup for CY26.

Trade Resilience

Geographic manufacturing flexibility offers resilience against US-China trade concerns, positioning Texas Instruments as a strong player in the market.

Negative Factors

Gross Margins

Stock is trading down due to the CFO comments that the company could lower utilization rates based on lower revenue in 4Q25 and 1Q26 which would pressure gross margins.

Tariff and Demand Concerns

Concerns about tariff pull-in demand potentially impacting results, coupled with stable but not improving demand, pose challenges for Texas Instruments.

Visibility and Demand

Short lead times provide limited visibility into future demand, and inconclusive comments on the automotive segment, especially in China, raise uncertainties.

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 generates revenue primarily through the sale of its semiconductor products, with a significant focus on analog and embedded processing solutions. The company's revenue model is based on selling these components to original equipment manufacturers (OEMs) and other customers in diverse markets. Key revenue streams include sales of analog semiconductors, which are essential for power management and signal processing, and embedded processors used in a variety of applications. Texas Instruments also benefits from long-term relationships and partnerships with major technology companies, which provide a stable customer base. Additionally, the company invests in research and development to innovate and expand its product offerings, further enhancing its market position and revenue potential.

Texas Instruments Financial Statement Overview

Summary

Texas Instruments demonstrates solid financial health with strong profitability, reflected in high gross and net profit margins. The balance sheet is robust, and cash flow generation is stable. However, growth has moderated, and the company should focus on enhancing cash flow efficiency.

Income Statement

Texas Instruments shows solid profitability with a TTM gross profit margin of 58.0% and a net profit margin of 30.4%. The revenue growth rate over the recent period is 2.6%, indicating modest growth. The EBIT and EBITDA margins are strong at 34.3% and 44.2%, respectively, showcasing operational efficiency. However, the decline from previous years suggests potential challenges in sustaining growth.

Balance Sheet

The balance sheet is robust with a debt-to-equity ratio of 0.78, indicating manageable leverage. The return on equity (ROE) stands at 29.7%, reflecting effective use of equity capital. The equity ratio is 48.6%, suggesting a healthy proportion of equity financing. However, the slight increase in total debt over time signals a need for cautious debt management.

Cash Flow

The company maintains a stable cash flow, with an operating cash flow to net income ratio of 1.26, indicating strong cash generation relative to earnings. The free cash flow to net income ratio is 0.30, suggesting room for improvement in free cash flow generation. A slight decline in free cash flow growth rate highlights potential pressures on cash reserves.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	15.64B	17.52B	20.03B	18.34B	14.46B
Gross Profit	9.09B	11.02B	13.77B	12.38B	9.27B
EBITDA	7.54B	9.01B	11.22B	10.06B	7.20B
Net Income	4.80B	6.51B	8.75B	7.77B	5.59B
Balance Sheet
Total Assets	35.51B	32.35B	27.21B	24.68B	19.35B
Cash, Cash Equivalents and Short-Term Investments	7.58B	8.57B	9.07B	9.74B	6.57B
Total Debt	13.60B	11.22B	9.15B	8.21B	7.12B
Total Liabilities	18.61B	15.45B	12.63B	11.34B	10.16B
Stockholders Equity	16.90B	16.90B	14.58B	13.33B	9.19B
Cash Flow
Free Cash Flow	1.50B	1.35B	5.92B	6.29B	5.49B
Operating Cash Flow	6.32B	6.42B	8.72B	8.76B	6.14B
Investing Cash Flow	-3.20B	-4.36B	-3.58B	-4.09B	-922.00M
Financing Cash Flow	-2.88B	-2.14B	-6.72B	-3.14B	-4.55B

Texas Instruments Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 187.93
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

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 187.93 is below the 20-day moving average (MA) of 196.90, below the 50-day MA of 199.99, and above the 200-day MA of 186.00, indicating a neutral trend. The MACD of -0.27 indicates Positive momentum. The RSI at 36.53 is Neutral, neither overbought nor oversold. The STOCH value of 23.11 is Neutral, 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	80 Outperform	$139.01B	22.42	13.11%	0.35%	58.22%	―
QCOM	79 Outperform	$172.33B	15.40	44.62%	2.18%	15.82%	34.20%
ADI	78 Outperform	$121.08B	62.61	5.65%	1.57%	7.08%	18.39%
ARM	76 Outperform	$146.32B	210.40	11.03%	―	17.84%	63.71%
TXN	75 Outperform	$170.27B	34.24	29.84%	2.89%	3.62%	-5.27%
Sector *	61 Neutral	$35.55B	8.88	-11.05%	1.87%	8.55%	-8.14%
INTC	58 Neutral	$107.72B	―	-19.24%	0.51%	-3.72%	-2120.70%

Texas Instruments Corporate Events

Texas Instruments Issues $1.2 Billion in Notes

On May 23, 2025, Texas Instruments completed the issuance and sale of $1.2 billion in notes, consisting of $550 million in 4.500% Notes due 2030 and $650 million in 5.100% Notes due 2035. This financial move, facilitated by major underwriters, is part of Texas Instruments’ strategic financial management, potentially impacting its market positioning and offering stakeholders insights into its future financial strategies.