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Texas Instruments
(NASDAQ:TXN)
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Rating:71Outperform
Price Target:
$325.00
▲(16.25% Upside)
Action:Reiterated
Date:07/23/26
TXN scores well on fundamentals and earnings-call momentum, driven by strong profitability, improving demand trends, and upbeat Q3 guidance with strong segment performance. The score is held back by premium valuation (high P/E), mixed cash-quality signals (lower FCF conversion and incentive-related FCF lumpiness), and a softer near-term technical setup (below 20/50-day averages with negative MACD).
Positive Factors
High, durable profitability
Sustained high gross and net margins reflect structural pricing power in analog and embedded markets, supporting long-term cash generation and reinvestment. Strong margins enable resilience across cycles and fund shareholder returns and R&D without relying on temporary demand spikes.
Negative Factors
Weaker FCF conversion; CHIPS incentives lumpy
Lower FCF conversion versus historical levels indicates earnings quality risk and higher reinvestment or working-capital needs. Material inclusion of CHIPS/ITC incentives makes reported FCF partially dependent on timing and policy, risking volatility in cash available for returns.
Read all positive and negative factors
Positive Factors
Negative Factors
High, durable profitability
Sustained high gross and net margins reflect structural pricing power in analog and embedded markets, supporting long-term cash generation and reinvestment. Strong margins enable resilience across cycles and fund shareholder returns and R&D without relying on temporary demand spikes.
Read all positive factors
Texas Instruments Key Performance Indicators (KPIs)
Any
Operating Income by Segment
Shows the profit generated by each business unit, highlighting which segments are driving profitability and where there may be challenges or opportunities for growth.
Shows the profit generated by each business unit, highlighting which segments are driving profitability and where there may be challenges or opportunities for growth.
Data provided by:
The Fly
The FlyTexas Instruments (TXN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$251.82B
Dividend Yield2.06%
Average Volume (3M)9.04M
Price to Earnings (P/E)41.7
Beta (1Y)1.26
Revenue Growth16.66%
EPS Growth20.14%
CountryUS
Employees33,000
SectorTechnology
Sector Strength88
IndustrySemiconductors
Share Statistics
EPS (TTM)6.61
Shares Outstanding913,247,700
10 Day Avg. Volume8,074,642
30 Day Avg. Volume9,035,769
Financial Highlights & Ratios
PEG Ratio7.94
Price to Book (P/B)9.69
Price to Sales (P/S)8.92
P/FCF Ratio60.58
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$329.87Price Target Upside17.99% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering25
EPS Forecast (FY)8.41
Revenue Forecast (FY)$21.86B
Texas Instruments Business Overview & Revenue Model
Company Description
Texas Instruments Incorporated (TI) specializes in the global design, production, and sale of semiconductors to electronics engineers and manufacturers. Its operations are structured into two core segments: Analog and Embedded Processing. The Anal...
How the Company Makes Money
Texas Instruments makes money primarily by selling semiconductors, with revenue largely generated from two reportable product segments: Analog and Embedded Processing. (1) Analog: TI sells analog chips that sense, condition, and manage real-world ...
Texas Instruments Earnings Call Summary
Earnings Call Date:Jul 22, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 27, 2026
Earnings Call Sentiment Positive
The call conveyed strong, broad-based operational and financial momentum: robust revenue and segment growth (notably industrial and data center), materially improved profitability and a sharp rebound in free cash flow. Management emphasized readiness on capacity and clean-room availability, started executing pricing initiatives, and provided above‑seasonal guidance for Q3. Key cautions included a flat personal-electronics result, a small decline in the Other segment, some reliance on CHIPS Act incentives in reported FCF, and potential near-term margin puts-and-takes (depreciation, OpEx posture and choppy ITC timing). Overall, positives — large revenue growth, margin expansion and cash generation — substantially outweighed the contained lowlights.Positive Updates
Strong Top-Line Growth
Revenue of $5.5B in Q2, up 13% sequentially and 23% year-over-year; company reported above-range Q2 results and booked above-seasonal guidance for Q3 (guide $5.65B–$6.15B).
Negative Updates
Personal Electronics Weakness
Personal electronics was flat year-over-year in Q2 (despite typical seasonal strength in Q3), with customer shortages pressuring that end market and ambiguity about the level of recovery in PE.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong Top-Line Growth
Revenue of $5.5B in Q2, up 13% sequentially and 23% year-over-year; company reported above-range Q2 results and booked above-seasonal guidance for Q3 (guide $5.65B–$6.15B).
Read all positive updates
Company Guidance
For third-quarter 2026, TI guided revenue of $5.65 billion to $6.15 billion and diluted EPS of $2.23 to $2.57, with an expected effective tax rate of about 13%; management also said operating expenses, net other income/expense and acquisition charges should be flat from Q2 to Q3 and that incremental revenue should fall through to operating profit at roughly a 70–85% rate excluding depreciation. They reiterated 2026 capital expenditures of $2.0–$3.0 billion, noted ITC/CHIPS Act timing can be lumpy, and reaffirmed the objective to return all free cash flow to shareholders; for context, Q2 cash flow from operations was $2.7 billion, Q2 CapEx was $514 million, trailing‑12‑month CFO was $8.7 billion and trailing‑12‑month free cash flow was $6.5 billion (including $1.6 billion of CHIPS Act incentives).Texas Instruments Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
74
Positive
Cash Flow
70
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 19.45B | 17.68B | 15.64B | 17.52B | 20.03B | 18.34B |
| Gross Profit | 11.35B | 10.08B | 9.09B | 11.02B | 13.77B | 12.38B |
| EBITDA | 9.11B | 8.25B | 7.54B | 9.01B | 11.22B | 10.06B |
| Net Income | 6.05B | 5.00B | 4.80B | 6.51B | 8.75B | 7.77B |
Balance Sheet | ||||||
| Total Assets | 35.88B | 34.59B | 35.51B | 32.35B | 27.21B | 24.68B |
| Cash, Cash Equivalents and Short-Term Investments | 7.00B | 4.88B | 7.58B | 8.57B | 9.07B | 9.74B |
| Total Debt | 14.05B | 15.39B | 15.04B | 12.27B | 9.50B | 8.21B |
| Total Liabilities | 17.88B | 18.31B | 18.61B | 15.45B | 12.63B | 11.34B |
| Stockholders Equity | 18.01B | 16.27B | 16.90B | 16.90B | 14.58B | 13.33B |
Cash Flow | ||||||
| Free Cash Flow | 5.36B | 2.60B | 1.50B | 1.35B | 5.92B | 6.29B |
| Operating Cash Flow | 8.67B | 7.15B | 6.32B | 6.42B | 8.72B | 8.76B |
| Investing Cash Flow | -3.11B | -1.44B | -3.20B | -4.36B | -3.58B | -4.09B |
| Financing Cash Flow | -4.95B | -5.69B | -2.88B | -2.14B | -6.72B | -3.14B |
Texas Instruments Technical Analysis
Negative
279.58
Price Trends
295.97
Negative
265.79
Positive
224.69
Positive
Market Momentum
-6.56
Positive
39.21
Neutral
22.54
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 279.58 is below the 20-day moving average (MA) of 287.70, below the 50-day MA of 295.97, and above the 200-day MA of 224.69, indicating a neutral trend. The MACD of -6.56 indicates Positive momentum. The RSI at 39.21 is Neutral, neither overbought nor oversold. The STOCH value of 22.54 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $929.52B | 18.37 | 70.55% | 0.06% | 166.98% | 701.44% | |
73 Outperform | $255.99B | 247.10 | 11.86% | ― | 25.12% | 48.03% | |
71 Outperform | $251.82B | 41.72 | 35.77% | 2.01% | 16.66% | 20.14% | |
71 Outperform | $178.96B | 54.35 | 9.79% | 1.12% | 29.75% | 83.33% | |
69 Neutral | $154.99B | 16.81 | 37.33% | 2.15% | 1.87% | -16.70% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
52 Neutral | $454.97B | -42.75 | -10.76% | ― | 7.47% | 55.56% |
* Technology Sector Average
TXN
Texas Instruments
269.04
90.92
51.05%
ADI
Analog Devices
361.88
142.43
64.90%
INTC
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MU
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829.50
721.90
670.93%
QCOM
Qualcomm
151.57
7.10
4.92%
ARM
ARM Holdings PLC ADR
239.06
99.01
70.70%
Texas Instruments Corporate Events
Executive/Board Changes
Texas Instruments Names Julie Knecht as New CFO
Neutral
Jun 2, 2026
On May 27, 2026, Texas Instruments’ board appointed long-time executive Julie Knecht as senior vice president and chief financial officer, with the role effective August 1, 2026. She will also continue as chief accounting officer, reflecting...
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.