TXN · Texas Instruments

The thesis

Texas Instruments' analog upturn rests on data-center demand and pricing, which lifted third-quarter 2026 revenue 28% year over year, and that gives the shares a modest edge over the S&P 500. The late-January 2027 report settles it. It shows fourth-quarter revenue against the $5.80–6.30 billion guide issued on 21 October 2026 and gives the first detail on 2027 pricing.

The rating is Medium because the reported business keeps improving and the shares have now recovered the whole November chip-sector fall. They closed at $278.15 on 5 November 2026, when the Philadelphia Semiconductor Index (SOX) fell 12.2%, its biggest one-day fall since 2020. They closed at $312.48 on 12 November 2026, above the $311.75 close of 4 November 2026 that GuruFocus reported before the fall. No company result came out in between. The gap to the index is narrow, and the January report decides it.

Management said the $6.05 billion midpoint of the fourth-quarter guide implies roughly flat sequential revenue, in a quarter that usually falls by a mid-to-high single-digit percentage. The view is that fourth-quarter revenue lands in the upper half of the range. Revenue below the $6.05 billion midpoint would prove that view wrong.

What the price already reflects: the 12 November 2026 close of $312.48 sits just under MarketBeat's $315.37 average analyst target of 10 November 2026, and GuruFocus put the trailing price-to-earnings ratio at 36.09 times on 5 November 2026 against a five-year median of 27.97 times. The market already pays for a recovery well beyond a normal cycle.

Bullish and bearish views on Texas Instruments Incorporated

The bull case on Texas Instruments Incorporated (TXN), in brief: revenue landed near the top of the range. The bear case: the stock is expensive on earnings.

Bull case

• Revenue landed near the top of the range. Third-quarter 2026 revenue was $6.055 billion, up 28% year over year, within $95 million of the $6.15 billion top of the range guided on 22 July 2026. Analog revenue was $4.911 billion, up 32%, according to the 21 October 2026 release.
• The guide runs against the season. Fourth-quarter revenue guidance of $5.80–6.30 billion compares with a $5.73 billion estimate, and guidance for earnings per share (EPS) of $2.45–2.79 compares with a $2.29 estimate, Benzinga reported on 21 October 2026.
• Data-center demand was still rising in October. Data-center revenue grew about 95% year over year and about 20% sequentially and is about 13% of revenue, management said on the 21 October 2026 call. Industrial revenue grew more than 40% year over year.
• Margins rose as inventory fell. Gross margin was 64.2% in the third quarter, against 57.4% a year earlier. Inventory was $4.672 billion, or 194 days, at 30 September 2026, against 222 days at the end of 2025, according to the 10-Q.
• The highest published target moved up again. Arete raised its target to $422 from $381 on 10 November 2026, fiscal.ai reported.
• The shares held up better than most chip peers. Texas Instruments and Analog Devices were the only two of the 30 iShares Semiconductor ETF holdings not at least 20% below their record highs after the 5 November 2026 fall, Benzinga reported. The shares then closed higher in each of the four sessions from 9 November to 12 November 2026, per adjusted daily closes.

Bear case

• The stock is expensive on earnings. The trailing price-to-earnings ratio of 36.09 times on 5 November 2026 compares with a five-year median of 27.97 times, and GuruFocus rated the shares modestly overvalued against its own $251 value estimate. The shares have closed higher since that reading.
• The price has caught up with the targets. MarketBeat's average target was $315.37 on 10 November 2026, a few dollars over the 12 November 2026 close. DZ Bank moved to Hold from Sell on 28 October 2026 with a $300 target, below that close, fiscal.ai reported.
• Directors sold after the report. SEC Form 4 filings show directors Sanchez, Patsley and Clark exercised options and sold 6,065, 4,532 and 4,306 shares at $301.56–$303.17 on 27 October 2026, and director Kirk sold 6,065 shares at $310.39 on 29 October 2026.
• Debt is rising ahead of the Silicon Labs deal. Total debt was $13.56 billion at 30 September 2026 against $8.14 billion of cash and short-term investments, per the 10-Q. The company issued $2.0 billion of notes at coupons of 5.000% to 5.750%, its 8-K of 9 November 2026 shows, with proceeds to help finance the acquisition.
• Data-center policy risk hangs over the sector. Euronews on 6 November 2026 linked the chip-sector fall to possible tougher rules on new data centers after the midterm elections, along with doubts about returns on AI spending.

Price setup

The shares closed at $278.15 on 5 November 2026 and $277.36 on 6 November 2026, the low closes of the chip-sector fall. They then closed at $295.73 on 9 November 2026, $300.52 on 10 November 2026, $309.81 on 11 November 2026 and $312.48 on 12 November 2026.

As of the 12 November 2026 close, the 50-day moving average is $281.79 and the 200-day moving average is $261.96, both below the price. The shares are up 12.3% over three months from the 14 August 2026 reference close. The 12 November 2026 close is 6.5% below the 52-week intraday high of $334.03, set on 22 June 2026, and far above the 52-week closing low of $153.33 on 20 November 2025.

The kill line sits under both the 6 November 2026 close and the 50-day average. A weekly close there would mean the shares had given back the whole rebound and more. A close above the $334.03 high of 22 June 2026 would put the shares at a new 52-week high ahead of the January report. The directors' late-October sales at $301.56–$310.39, per SEC Form 4 filings, sit just under the 12 November 2026 close. The only new securities since the 10-Q are the $2.0 billion of notes; there has been no share issuance.

Catalysts ahead

• 24 November 2026: Analog Devices fiscal fourth-quarter 2026 report and call. The closest peer gives the next outside reading on industrial and data-center analog demand after the 5 November 2026 sector fall and the rebound that followed.
• ~26 January 2027 (est.): Texas Instruments fourth-quarter 2026 earnings report and call. Tests revenue against the $5.80–6.30 billion guide and its $6.05 billion midpoint, and gives the first detail on 2027 pricing and data-center growth.

What would change the view

A weekly close below $272, under the $277.36 close of 6 November 2026 and the 50-day moving average, which would show the November chip-sector fall turning into a lasting re-rating of the shares. Fourth-quarter 2026 revenue below the $5.80 billion guidance floor issued on 21 October 2026 would also break the case.

The risks this note tracks, each with what would confirm it:

• Tougher data-center rules after the 2026 midterms, or lower AI spending, slow the fastest-growing end market. Confirmed by: flat or lower sequential data-center revenue reported at the January 2027 call.
• The counter-seasonal fourth-quarter outlook fails and the recovery stalls. Confirmed by: fourth-quarter 2026 revenue below the $5.80 billion guidance floor at the January 2027 report.
• The industrial recovery proves cyclical and rolls over. Confirmed by: Analog Devices guiding down on 24 November 2026, or a sequential decline in Texas Instruments' industrial revenue at the January 2027 call.
• Price increases cease to reach margins while inventory builds. Confirmed by: gross margin back below the 61.2% second-quarter level and inventory days rising from 194 at the January 2027 report.
• Valuation caps the shares now that the price sits near the average analyst target. Confirmed by: downgrades or target cuts that pull MarketBeat's average target below its $315.37 reading of 10 November 2026.
• The Silicon Labs acquisition is delayed or closes on costlier terms after debt has been raised for it. Confirmed by: a challenge from China's market regulator or a closing date pushed past the first half of 2027.

What it trades with

The shares move with the semiconductor index on sector-wide days: they fell nearly 11% on 5 November 2026 as the SOX fell 12.2%. Bank of America said chip stocks traded at a 22% discount to the S&P 500 after the SOX fell 38% from its June peak, Benzinga reported on 6 November 2026. The closest peer is Analog Devices, the other large analog maker that stayed out of bear-market territory that day, and its 24 November 2026 report is the next outside reading on the same end markets. Data center is about 13% of revenue, so the shares react to AI-spending news, though less than the GPU and memory names that dominate the index. The Silicon Labs deal ties part of the case to regulatory approval, including a possible review by China's market regulator, Futurum noted.