Texas Instruments Incorporated

(NASDAQ Global Select)
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Bullish +65

What Could Send Texas Instruments Stock Soaring? | Trefis

Capacity expansion Cloud expansion Company update AI-generated analysis

📈 Texas Instruments stock returned 73.3% over the past twelve months, significantly outperforming the S&P 500's 9.8% return.

🚀 Data center sales surged approximately 95% in fiscal Q3 2026 year-over-year and rose about 20% from the prior quarter.

💰 The data center market now represents roughly 13% of Texas Instruments' total revenue base.

🔧 TXN sells approximately 10,000 different parts into the data center market, a number management says grows every quarter.

🏭 Management confirms that clean rooms are built and a new site in Malaysia is quickly ramping up production capacity.

⚠️ Lead times on assembly tools are extending, particularly at the back end, potentially impacting supply availability.

📉 TXN trades at 35.6 times earnings over the past twelve months, compared to a 21.8 multiple for the S&P 500.

📅 For fiscal Q4 2026, management guides revenue between $5.8 billion and $6.3 billion against Q3's $6.06 billion.

🔮 Management expects secular growth in chip content to continue alongside a strong cyclical recovery.

💸 Capital spending for 2026 is expected to be between $2 billion and $3 billion, with details to be reported in January 2027.

Bullish Signals
  • Texas Instruments stock returned 73.3% over the past twelve months, significantly outperforming the S&P 500.
  • Data center sales rose approximately 95% in fiscal Q3 2026 year-over-year and about 20% from the previous quarter.
  • Management sees no slowdown in customer investment in data centers, with demand still rising.
  • TXN sells about 10,000 different parts into the data center market, a number that grows every quarter.
  • The company has built its clean rooms and is quickly ramping a new site in Malaysia to support production.
  • Management expects secular growth in chip content to continue alongside a strong cyclical recovery.
Risk Factors
  • Lead times on assembly tools are extending, especially at the back end, which could constrain supply.
  • TXN is not getting as much output from its outside assembly partners as it wanted.
  • The stock trades at 35.6 times earnings over the past twelve months, significantly above the S&P 500's 21.8 multiple.
  • Shares currently sit 15.7% below their highest close of the past year reached on June 22, 2026.
Full Analysis
Texas Instruments (TXN) stock has delivered a significant 73.3% return over the past twelve months, substantially outperforming the S&P 500's 9.8% gain. This performance is largely driven by surging demand from data center customers, which management estimates now accounts for approximately 13% of the company's total revenue. Sales into the data center market have accelerated rapidly, rising roughly 95% in fiscal Q3 2026 compared to the same period a year ago and increasing about 20% from the previous quarter. Management indicates that demand remains robust with no signs of slowing, supported by a growing portfolio of approximately 10,000 distinct parts sold into this sector. Despite the strong growth trajectory, investors should note that TXN trades at a premium valuation of 35.6 times earnings over the past twelve months, compared to a 21.8 multiple for the broader S&P 500. The company is well-positioned operationally with completed clean rooms and a new site in Malaysia ramping up, though lead times for assembly tools are currently extending. Looking ahead, TXN has provided revenue guidance for fiscal Q4 2026 between $5.8 billion and $6.3 billion, following a Q3 result of $6.06 billion. While the company expects secular growth in chip content to continue, potential risks include a fading cyclical recovery or delays in tool availability that could impact supply chain efficiency.