TXN · Texas Instruments Incorporated · Stock research

Current Thesis

The analog-cyclical recovery and the AI-data-center-power re-rate remain fundamentally intact, but the trade has changed character. Q2 2026 (reported 2026-07-22) was a clean double beat — revenue $5.46B, +23% YoY, above the $5.00–5.40B guide high end, with EPS $2.14 (including a $0.05 one-time benefit) versus a $1.77–2.05 guide — and the Q3 guide was raised. The stock still sold off, sliding from ~$294.19 (2026-07-22) to ~$279.90 (2026-07-24). Good news that cannot hold the bid is the signature of a maturing move: the late-June PT-raise leg that carried price toward the $331.51 all-time high is spent, the binary print has passed, and the tape has given back the entire June–July consolidation. This is no longer an accelerating setup; it is a post-catalyst unwind that needs to base before it earns a fresh entry.

Bullish and bearish views on Texas Instruments Incorporated

The model's bull view on Texas Instruments Incorporated (TXN), in brief: Q2 2026 (2026-07-22): revenue $5.46B, +23% YoY; operating profit +48% YoY to $2.31B; gross margin 61.4% — a broad beat led by industrial, automotive and data center. The bear view: The reaction is the signal: a double beat plus a raised Q3 guide produced a decline from ~$294.19 (2026-07-22) to ~$279.90 (2026-07-24). Both cases follow in full.

Bull Case

• Q2 2026 (2026-07-22): revenue $5.46B, +23% YoY; operating profit +48% YoY to $2.31B; gross margin 61.4% — a broad beat led by industrial, automotive and data center.
• Segment strength on the Q2 call (2026-07-22): Analog +26% YoY, Embedded Processing +16% YoY — the core franchise is compounding, not just recovering off a trough.
• Q3 2026 guide (issued 2026-07-22): revenue $5.65–6.15B (midpoint ~$5.90B, above the ~$5.7B Street) and EPS $2.23–2.57 — management guiding the upturn to widen.
• Management on 2026-07-23 said AI data center demand "will stay strong for the foreseeable future," keeping the data-center revenue line the growth engine.
• Cash engine intact: trailing-12-month operating cash flow $8.67B and free cash flow $6.53B (33.6% of revenue) per the Q2 report (2026-07-22), funding the Sherman/Lehi fab build and the dividend.
• Bull-side target cluster (2026-07-23): Keybanc $400, Baird $385, Benchmark $360, plus Rosenblatt $350 (2026-07-24) — outlier targets imply meaningful upside from ~$280.
• Silicon Labs $7.5B all-cash deal ($231/sh, announced 2026-02-04) cleared its HSR waiting period 2026-05-22; targeted close H1 2027 adds embedded wireless connectivity content.

Bear Case

• The reaction is the signal: a double beat plus a raised Q3 guide produced a decline from ~$294.19 (2026-07-22) to ~$279.90 (2026-07-24). When a stock cannot rally on a beat, sellers are distributing into strength.
• The sell-side is split, not confirming: Goldman Sachs Sell $225 and Morgan Stanley Underweight $255 (both 2026-07-23) and Bernstein Market Perform $290 sit against the bulls; the wide dispersion undercuts the "everyone's raising targets" read.
• The binary is behind the tape. With Q2 printed, the next scheduled company driver is the ~late-October Q3 report, leaving roughly three months with no catalyst to offset profit-taking.
• Structure has broken: price is below the $331.51 ATH and below the ~$294–308 June–July consolidation, having lost the rising 20-EMA (low-$300s) that framed the late-June breakout leg.
• Hyperscaler capex is the demand engine and it keeps wobbling — GOOGL/MSFT fell up to 6% on spending concerns 2026-06-22, and the 2026-07-23 "Google AI cash burn" headline shows the market re-pricing that risk into the data-center line.
• Mega-cap gravity: at ~$280 the market cap is ~$255B, capping velocity — a strong outcome is a grind back toward the outlier PTs, not a fast double.
• CFO transition: Julie Knecht effective 2026-08-01 (announced 2026-06-02), succeeding Rafael Lizardi — a finance-seat change days after the print.

Setup & Price Structure

• Price ~$279.90 (2026-07-24), down from ~$294.19 (2026-07-22) into the earnings reaction; 52-week range $152.73–$331.51.
• The name handed back the ~$294–308 June–July consolidation post-print and lost the rising 20-EMA — the leg that ran on the late-June PT cluster has unwound rather than paused.
• The 200-DMA is rising through the ~$210–220 zone; price remains roughly +30% above it, so this is the unwind of an extended advance, with no fresh base yet built.
• First support is the post-earnings shelf near $279–281 (2026-07-23/24). A weekly close below $272 converts the fade into a trend reversal; a weekly reclaim of ~$308 would repair the breakout and put $331.51 back in view.
• Analyst tape (2026-07-23) spans $225–400 with an average near $320 across 36 analysts; price now sits below that average, but the mean is dragged higher by outlier bulls rather than a tight consensus.

Catalyst Calendar (next 30 days)

• Mid-to-late August: analog-peer reads — ADI, MCHP, ON and NXPI report late-Aug into early-Sept, plus monthly semiconductor billings; sequential order/backlog trends there re-price the cycle for TXN.
• ~2026-10-21 (est.): Q3 2026 earnings — the next binary, outside the 30-day window; no blackout yet.
• No FDA/PDUFA, analyst day, or scheduled company catalyst inside the next 30 days — the tape is between drivers, which favors mean-reversion over a fresh impulse leg.

Elapsed catalysts

• 2026-08-01: CFO transition — Julie Knecht becomes CFO (announced 2026-06-02), succeeding Rafael Lizardi. Governance event, not a numbers print. (passed 8d ago)

What Would Change Our Mind

• A weekly close below $272 confirms the post-earnings break as a genuine reversal and takes the analog re-rate off the table near-term. Conversely, a weekly reclaim of ~$308 repairs the lost consolidation and re-arms a continuation toward the $331.51 ATH.
• Analog peers (ADI, MCHP, ON) printing sequential order or backlog declines in their late-August reports would confirm the cycle re-rolling — the bear scenario, read straight across to TXN.
• A hyperscaler capex cut (GOOGL/MSFT/AMZN/META guiding data-center spend lower) hits the fast-growing data-center revenue line first and would break the AI-power leg of the story.
• Re-acceleration proof: a clean higher low holding above ~$272 followed by data-center revenue re-accelerating on the Q3 print would justify a fresh momentum entry rather than the current stand-aside.

Correlation Notes

• Moves with the analog-cycle cohort — ADI, MCHP, ON, NXPI — where a peer order-trend miss transmits directly to TXN's multiple.
• Second-order exposure to the AI-datacenter capex complex (NVDA, AVGO and hyperscaler spend) through power and analog content; the 2026-06-22 and 2026-07-23 hyperscaler-spend scares show the beta running both ways.
• Rate-sensitive mega-cap: inflation running above 4% (June data) and Fed drift-higher risk pressure the multiple, and the name tracks the broad SOX/SMH semis complex.