Texas Instruments Posts Surging Numbers as Capital Expenditures Drop

Texas Instruments represents one of the highest-quality, widest-moat franchises in the semiconductor industry. It’s uniquely positioned to compound profits as automotive and industrial electronics proliferate. The company’s product catalog spans over 80,000 distinct components sold to more than 100,000 customers worldwide. This insulates the enterprise from customer concentration risks and technology obsolescence. Furthermore, the firm has navigated past the peak of its multi-year capital expenditure supercycle: with heavy fab shells now built, future capex requirements are dropping sharply just as manufacturing throughput increases.

The stock trades at 34.8 times the company’s forward earnings forecast. That’s high but justified by its high earnings visibility.

TEXAS INSTRUMENTS INC. (Nasdaq symbol TXN; www.ti.com) makes analog chips, which convert inputs like touch and sound into electronic signals that computers can understand. Other products include embedded processor chips, which perform mathematical calculations, and calculators.

Texas Instruments is now buying Silicon Labs Inc. (Nasdaq symbol SLAB) for $7.5 billion. That firm designs chips to wirelessly connect devices to the Internet (typically called the Internet of Things). The company expects to complete the purchase in the first half of 2027.

The addition of Silicon Labs’ technology will let Texas Instruments offer a wider range of products to its customers. As well, transferring Silicon Labs’ production from overseas chipmaking plants to Texas Instruments’ own facilities will help cut $450 million from its annual costs within three years.
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Texas Instruments’ revenue and profits keep soaring

Thanks to strong demand for its analog chips from builders of artificial intelligence datacentres and automakers, the company’s revenue in the second quarter of 2026 rose 22.8%, to $5.46 billion from $4.45 billion a year earlier. The higher revenue also lifted earnings by 51.8%, to $2.14 a share (or a total of $1.98 billion) from $1.41 a share (or $1.30 billion)

Texas Instruments also continues to upgrade its own operations. It plans to invest $60 billion to upgrade and expand its plants in Texas and Utah. These improvements will help lower its production costs and help customers avoid U.S. tariffs on chips from Asia.

Texas Instruments’ strong balance sheet supports these investments. As of June 30, 2026, its long-term debt of $12.9 billion was just 5% of its market cap. It also held cash of $7.0 billion.

For 2026, investors can expect company earnings of $8.47 a share, and the stock trades at a high 34.8 times that estimate. The multiple is nonetheless reasonable given Texas Instruments’ high research spending—9.8% of revenue in the latest quarter. The company has also raised its annual
dividend rate each year for the past 22 years—the current rate of $5.68 a share yields 2.1%.

Recommendation in Wall Street Stock Forecaster: Texas Instruments Inc. is a buy.

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Jim Bates

Jim is an associate editor at TSI Network. He is the lead reporter and analyst for The Successful Investor and Wall Street Stock Forecaster and a member of the Investment Planning Committee. Jim has held the Chartered Financial Analyst designation since 1992 and spent more than a decade at the Financial Post DataGroup before joining TSI Network. He has a Bachelor of Commerce degree from the University of Toronto.

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