Texas Instruments (TXN) AI Stock Analysis

• Market Cap: $202.55B
• Dividend Yield: 3.11%
• Average Volume (3M): 6.80M
• Price to Earnings (P/E): 41.3
• Beta (1Y): 1.14
• 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: 908,623,050
• 10 Day Avg. Volume: 10,466,747
• 30 Day Avg. Volume: 6,798,642
• 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: 1.05
• Enterprise Value/Revenue: 12.07
• Enterprise Value/Gross Profit: 21.16
• Enterprise Value/Ebitda: 25.86
• 1Y Price Target: $220.67
• Price Target Upside: -1.01% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 25
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 71 Outperform
• Price Target: $239.00 ▲(7.21% Upside)

TXN scores well on business quality and improving fundamentals, supported by strong margins, solid operating cash flow, and a cautiously positive outlook with data-center-led momentum. The score is held back by weaker free-cash-flow conversion and higher leverage, while technicals suggest an uptrend but near-term overbought conditions. Valuation is a meaningful headwind due to a high P/E despite a moderate dividend yield.

Positive Factors

High profitability margins

Sustained high gross and net margins reflect long-standing pricing power and cost efficiency in TI’s analog-heavy portfolio. Durable margins support reinvestment in R&D and fabs, enable consistent shareholder returns, and provide resilience across semiconductor cycles.

Strong free cash flow generation

Significant FCF growth and high cash conversion create durable financial flexibility to fund capex, R&D, dividends and buybacks without overreliance on markets. Strong cash generation underpins capital allocation and supports investment in fabs and long-term competitiveness.

Diversified, structurally growing end markets

A shift toward industrial, automotive and data center end markets reduces cyclicality relative to consumer-facing semiconductors. These sectors benefit from secular trends (electrification, automation, AI infrastructure), offering steadier, long-term demand and higher content per vehicle/system.

Negative Factors

Rising leverage to monitor

A meaningful debt load (and management’s note to monitor rising leverage) reduces financial flexibility over cycles. In downturns higher leverage can eat into FCF available for dividends, buybacks or reinvestment and increase sensitivity to rate moves or weaker margins.

Elevated inventory days

High and rising inventory ties up working capital, increases obsolescence and markdown risk in a technology business, and can pressure cash flow and margins if demand softens. Persistently elevated inventories weaken balance sheet efficiency and capital allocation optionality.

Sequential margin pressure and end-market softness

Sequential margin compression and noted weakness in personal electronics/communications signal exposure to cyclical retail and comms demand. If mix shifts or loadings persist, margins could remain pressured, undermining long-term margin sustainability and cash generation.

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 semiconductor products, which are used in a vast array of electronic devices. The company's revenue model is based on the design, manufacturing, and sale of analog and embedded processing chips, which contribute significantly to its earnings. Key revenue streams include the Analog segment, which accounts for the majority of sales, driven by the demand for power management and signal processing components. The Embedded Processing segment also contributes to revenue through microcontrollers and processors used in various applications. Texas Instruments benefits from long-term relationships with major customers in multiple industries, which provide consistent and recurring revenue. Additionally, the company invests in research and development to innovate and introduce new products that meet evolving market needs, further enhancing its revenue potential.

Texas Instruments Financial Statement Overview

Summary

Strong profitability (TTM gross margin ~57%, net margin ~28%) and high-quality operating cash flow (OCF ~2.26x net income) support the score. Offsetting factors are the step-down in margins vs. prior peaks, higher leverage (TTM debt-to-equity ~0.86), and weak free-cash-flow conversion (TTM FCF ~$2.6B, ~36% of net income) despite recent improvement.

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	14.05B	13.60B	11.22B	9.08B	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: Positive
• Last Price: 222.92
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TXN, the sentiment is Positive. The current price of 222.92 is above the 20-day moving average (MA) of 199.27, above the 50-day MA of 184.46, and above the 200-day MA of 182.15, indicating a bullish trend. The MACD of 11.35 indicates Negative momentum. The RSI at 76.61 is Negative, neither overbought nor oversold. The STOCH value of 91.33 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TXN.

Texas Instruments Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ADI	77 Outperform	$156.58B	68.20	6.57%	1.43%	16.89%	39.29%
MU	77 Outperform	$427.02B	39.87	22.55%	0.20%	45.43%	203.31%
TXN	71 Outperform	$202.55B	41.35	30.02%	3.11%	9.90%	1.65%
ARM	69 Neutral	$111.30B	134.71	12.37%	―	24.81%	27.33%
QCOM	67 Neutral	$159.02B	29.35	23.34%	2.01%	13.66%	-45.40%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
INTC	57 Neutral	$243.81B	―	-0.25%	―	-1.49%	―