Texas Instruments' data center sales double in Q2'26 as AI spending, rising chip content and capacity support growth.
I'm rating Texas Instruments (TXN) as a Strong Buy with a 12 - 18 month price target of $332, implying 26% upside. TXN's earnings inflection is driven by accelerating revenue growth, expanding operating profit, and broadening recovery across industrial, data center, and automotive segments. Despite premium headline multiples, TXN's 1.33x FWD PEG is nearly 70% below its 5-year average, reflecting rapid earnings recovery and improved capital efficiency.
Texas Instruments (NASDAQ:TXN | TXN Price Prediction) stock is up 55% year to date and trades at $264.70, a rally that's beaten the broad market by a wide margin while still lagging its own chip sector.
Texas Instruments (TXN) concluded the recent trading session at $258.8, signifying a -1.07% move from its prior day's close.
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Texas Instruments hikes prices as chip demand strengthens, adding a new lever for revenues and margins as unit volumes drive near-term growth.
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Texas Instruments (TXN) closed at $258.44 in the latest trading session, marking a +1.82% move from the prior day.
TXN's premium valuation is backed by accelerating earnings, AI infrastructure growth, strong cash flow and manufacturing investments.
Industrial segment recovery and rapid Data Center expansion, supported by the Nvidia partnership, are key drivers for Texas Instruments' revised five-year average revenue growth forecast of 13.5%. Data Center is projected to grow from 8.6% of total revenue in 2025 to 25.2% by 2028, contributing up to 65.7% of total revenue growth by then. While Texas Instruments' Data Center partnership with Nvidia is not exclusive, its broad Analog portfolio positions it to capture significant end-market growth despite competitive risks.
Texas Instruments is emerging from a prolonged industrial and automotive downturn, with Q2 showing broad-based growth across all tracked end markets. Analog segment revenue surged 26% year over year, and pricing power has returned, with management confirming the first broad price increases in years. TXN's valuation is now roughly in line with Analog Devices, offering a higher dividend yield and benefiting from secular growth in chip content and data center exposure.
Texas Instruments (TXN) closed at $266.54 in the latest trading session, marking a +1.82% move from the prior day.