tiprankstipranks
Trending News
More News >
Texas Instruments (TXN)
:TXN
Advertisement

Texas Instruments (TXN) AI Stock Analysis

Compare
6,743 Followers

Top Page

TXN

Texas Instruments

(NASDAQ:TXN)

Rating:74Outperform
Price Target:
$209.00
▲(12.21%Upside)
Texas Instruments scores a 74, driven by strong financial health and impressive revenue growth. However, the stock faces valuation concerns and technical challenges. The earnings call provides optimism with growth in key sectors, but geopolitical uncertainties and market-specific challenges remain risks.
Positive Factors
Free Cash Flow
With capacity investments expected to decrease, Texas Instruments is set to generate significant free cash flow per share.
Industry Recovery
Texas Instruments is well positioned for industry recovery due to its diverse manufacturing capacity and participation in a broad global cyclical semiconductor industry recovery.
Tax Impact
Management believes the increase in Investment Tax Credit will significantly reduce its cash tax rate in the next several years, positively impacting cash flow.
Negative Factors
Automotive Market
The company's automotive market is struggling, showing low-single digit growth and declines, which impacts its overall performance.
Earnings Guidance
The company provided lighter-than-expected earnings guidance for the upcoming quarter due to pull-in orders driven by tariff uncertainties, particularly affecting the Chinese Industrial business.
Tariff Concerns
Tariff and macroeconomic concerns continue to linger, potentially affecting Texas Instruments' performance.

Texas Instruments (TXN) vs. SPDR S&P 500 ETF (SPY)

Texas Instruments Business Overview & Revenue Model

Company DescriptionTexas 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 MoneyTexas Instruments generates revenue primarily through the design, manufacture, and sale of analog and embedded processing products. The analog segment, which includes high-performance analog and power management products, is the largest contributor to TI's revenue. These products are used in a wide range of applications, including signal-chain and power-supply designs. The embedded processing segment includes microcontrollers, digital signal processors (DSPs), and applications processors, which are used to control many types of electronic systems. TI's business model is driven by the high-volume production of semiconductors, leveraging its manufacturing capabilities to achieve cost efficiencies. The company also forms strategic partnerships and long-term supply agreements with various customers, which help stabilize revenue streams and ensure product demand. Additionally, TI invests in research and development to innovate and enhance product offerings, further driving growth and maintaining a competitive edge in the semiconductor industry.

Texas Instruments Key Performance Indicators (KPIs)

Any
Any
Revenue by Segment
Revenue by Segment
Breaks down revenue by business unit, revealing which segments are contributing most to sales and where there might be potential for expansion or risk.
Chart InsightsTexas Instruments' Analog segment shows resilience, with a recent uptick in revenue, aligning with the industrial market's recovery. However, the Embedded Processing segment faces headwinds, reflecting broader challenges in the semiconductor cycle. The earnings call highlights revenue growth and recovery in key markets, but warns of declining gross margins and rising inventories. The company is strategically focusing on flexibility to navigate geopolitical uncertainties, aiming for long-term stability despite current pressures.
Data provided by:Main Street Data

Texas Instruments Earnings Call Summary

Earnings Call Date:Jul 23, 2025
(Q2-2025)
|
% Change Since: 0.00%|
Next Earnings Date:Oct 28, 2025
Earnings Call Sentiment Neutral
The earnings call presents a mixed picture. While there is strong revenue growth and recovery in several markets, challenges remain in the automotive market and due to geopolitical uncertainties. Operating expenses have increased, and gross margins are expected to remain flat despite revenue growth.
Q2-2025 Updates
Positive Updates
Strong Revenue Growth
Revenue for the second quarter was $4.4 billion, an increase of 9% sequentially and 16% year-over-year. Analog revenue grew 18% year-over-year, Embedded Processing grew 10%, and the other segment grew 14% from the year-ago quarter.
Industrial Market Recovery
The industrial market increased upper teens year-over-year and mid-teens sequentially, indicating a broad recovery across all sectors.
Enterprise Systems and Communications Equipment Growth
Enterprise systems grew about 40% year-over-year and 10% sequentially. Communications equipment grew more than 50% year-over-year and was up about 10% sequentially.
Strong Cash Flow and Shareholder Returns
Cash flow from operations was $1.9 billion in the quarter, and $6.4 billion on a trailing 12-month basis. The company returned $6.7 billion to owners in the past 12 months.
Negative Updates
Automotive Market Challenges
The automotive market increased mid-single digits year-over-year but decreased low single digits sequentially. Recovery in this market has been shallow, with the market still not showing strong signs of recovery.
Geopolitical and Tariff Uncertainties
Tariffs and geopolitical issues are disrupting and reshaping global supply chains, creating uncertainty in market conditions.
Increased Operating Expenses
Operating expenses in the quarter were $1 billion, up 5% from a year ago.
Flat Gross Margin Despite Revenue Growth
Despite higher revenue, gross margin is expected to be about flat in the third quarter due to higher depreciation and unfavorable net of other income and expense and interest expense.
Company Guidance
During the Texas Instruments Second Quarter 2025 Earnings Conference Call, the company provided guidance for the third quarter of 2025, projecting revenue in the range of $4.45 billion to $4.80 billion and earnings per share between $1.36 and $1.60. The guidance reflects ongoing cyclical recovery across various sectors, although the company remains cautious due to potential impacts from tariffs and geopolitical uncertainties. In the second quarter, Texas Instruments reported a revenue of $4.4 billion, which marked a 9% sequential increase and a 16% year-over-year growth, with particular strength in communications equipment (up over 50% year-over-year) and enterprise systems (up about 40% year-over-year). The company highlighted its strong cash flow position, with cash flow from operations at $1.9 billion for the quarter and $6.4 billion on a trailing 12-month basis, while also emphasizing its robust balance sheet with $5.4 billion in cash and short-term investments. Looking forward, Texas Instruments intends to maintain flexibility to navigate potential changes in the economic and geopolitical landscape, while continuing its focus on areas that will drive long-term value, such as manufacturing and technology investments.

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
84
Very Positive
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
78
Positive
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
76
Positive
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.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue15.64B17.52B20.03B18.34B14.46B
Gross Profit9.09B11.02B13.77B12.38B9.27B
EBITDA7.54B9.01B11.22B10.06B7.20B
Net Income4.80B6.51B8.75B7.77B5.59B
Balance Sheet
Total Assets35.51B32.35B27.21B24.68B19.35B
Cash, Cash Equivalents and Short-Term Investments7.58B8.57B9.07B9.74B6.57B
Total Debt13.60B11.22B9.15B8.21B7.12B
Total Liabilities18.61B15.45B12.63B11.34B10.16B
Stockholders Equity16.90B16.90B14.58B13.33B9.19B
Cash Flow
Free Cash Flow1.50B1.35B5.92B6.29B5.49B
Operating Cash Flow6.32B6.42B8.72B8.76B6.14B
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 Price186.25
Price Trends
50DMA
199.91
Negative
100DMA
184.21
Positive
200DMA
188.45
Negative
Market Momentum
MACD
2.62
Positive
RSI
27.28
Positive
STOCH
21.15
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 186.25 is below the 20-day moving average (MA) of 212.99, below the 50-day MA of 199.91, and below the 200-day MA of 188.45, indicating a bearish trend. The MACD of 2.62 indicates Positive momentum. The RSI at 27.28 is Positive, neither overbought nor oversold. The STOCH value of 21.15 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TXN.

Texas Instruments Risk Analysis

Texas Instruments disclosed 18 risk factors in its most recent earnings report. Texas Instruments reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Texas Instruments Peers Comparison

Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
83
Outperform
$173.47B16.0942.21%2.15%16.15%32.28%
80
Outperform
$257.24B116.303.90%21.71%99.00%
80
Outperform
$150.08B22.7636.37%1.10%6.12%-5.66%
74
Outperform
$169.20B34.0629.88%2.89%3.62%-5.13%
71
Outperform
$113.18B62.095.21%2.08%-6.17%-14.16%
71
Outperform
$122.23B19.7113.11%0.52%58.22%
63
Neutral
$34.55B5.25-11.40%1.91%5.47%-20.39%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TXN
Texas Instruments
186.25
-5.28
-2.76%
AMD
Advanced Micro Devices
158.65
20.33
14.70%
ADI
Analog Devices
228.08
10.89
5.01%
AMAT
Applied Materials
187.01
-13.42
-6.70%
MU
Micron
109.83
2.88
2.69%
QCOM
Qualcomm
159.88
-11.74
-6.84%

Texas Instruments Corporate Events

Private Placements and FinancingBusiness Operations and Strategy
Texas Instruments Issues $1.2 Billion in Notes
Neutral
May 23, 2025

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.

The most recent analyst rating on (TXN) stock is a Hold with a $160.00 price target. To see the full list of analyst forecasts on Texas Instruments stock, see the TXN Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 24, 2025