TXN AI Stock Analysis – Buy, Hold, or Avoid?
Texas Instruments Incorporated (TXN)
Texas Instruments (TXN) is fundamentally solid with strong cash flow and leading analog market share, but faces margin compression, cyclical headwinds, and a premium valuation. Technicals remain bullish in the short term, but sentiment and valuation suggest limited upside, making the stock best suited for patient investors awaiting clearer catalysts. The overall risk/reward is balanced, with moderate risk and modest upside potential over the next 12–24 months.
Fundamentals
Texas Instruments (TXN) demonstrates stable cash generation and strong market positioning in analog semiconductors, but faces margin compression and muted earnings growth in a cyclical sector. While fundamentals remain solid, recent growth has slowed, and the stock commands a rich valuation, suggesting a balanced risk/reward profile at current levels. Technical and sentiment cues further support a patient, wait-and-see approach.
Financial Highlights
- Revenue
- Net Income
- Net Margin (%)
Revenue
10.38% YoY
Q4 2025
Net Income
-3.49% YoY
Q4 2025
Net Margin
Q4 2025
Growth Metrics
Revenue Growth YoY
Latest Quarter: Q4 2025
Net Income Growth YoY
Latest Quarter: Q4 2025
Revenue Per Share Growth YoY
Latest Quarter: Q4 2025
EPS Growth YoY
Latest Quarter: Q4 2025
Book Value Per Share Growth YoY
Latest Quarter: Q4 2025
| Q4 2025 | Q3 2025 | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | Q1 2024 | |
|---|---|---|---|---|---|---|---|---|
| Revenue | 4.4B | 4.7B | 4.4B | 4.1B | 4.0B | 4.2B | 3.8B | 3.7B |
| Revenue Growth YoY | +10.38% | +14.24% | +16.38% | +11.14% | -1.72% | -8.41% | -15.65% | -16.40% |
| Net Income | 1.2B | 1.4B | 1.3B | 1.2B | 1.2B | 1.4B | 1.1B | 1.1B |
| Net Income Growth YoY | -3.49% | +0.15% | +14.91% | +6.70% | -12.11% | -20.30% | -34.55% | -35.30% |
| EPS | $1.27 | $1.50 | $1.42 | $1.29 | $1.32 | $1.49 | $1.23 | $1.21 |
| EPS Growth YoY | -3.79% | +0.67% | +15.45% | +6.61% | -12.00% | -20.74% | -34.92% | -35.64% |
Profitability Metrics
Gross Margin
TTM
Operating Margin
TTM
Net Margin
TTM
Return on Equity
TTM
Return on Assets
TTM
| Q4 2025 | Q3 2025 | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | Q1 2024 | |
|---|---|---|---|---|---|---|---|---|
| Gross Margin | 55.89% | 57.42% | 57.89% | 56.84% | 57.75% | 59.60% | 57.85% | 57.22% |
| Operating Margin | 33.30% | 35.07% | 35.14% | 32.54% | 34.36% | 37.44% | 32.65% | 35.13% |
| Net Margin | 26.29% | 28.76% | 29.11% | 28.98% | 30.07% | 32.81% | 29.49% | 30.18% |
| Return on Equity (ROE) | 7.15% | 8.20% | 7.89% | 7.19% | 7.13% | 7.89% | 6.55% | 6.51% |
| Return on Assets (ROA) | 3.87% | 4.49% | 4.27% | 4.05% | 3.90% | 4.43% | 3.70% | 3.65% |
Technical Analysis
TXN is currently in a strong uptrend with bullish technical signals highlighted by a golden cross and price trading above key moving averages. Momentum indicators such as ADX confirm the strength of the trend, although the RSI shows a neutral reading signaling no extreme overbought or oversold conditions. Key support near the 50-day SMA around $201 supports the current price level, while resistance is seen near the recent 52-week high of $231.
No extreme reading
Mixed signals
Strong trend active
Watching for cross
Key Technical Values
Price with Moving Averages
50-day, 150-day and 200-day simple moving averages
Relative Strength Index
Momentum oscillator measuring speed and magnitude of price changes
RSI (14)
Earnings
Texas Instruments (TXN) demonstrates stable cash generation and strong market positioning in analog semiconductors, but faces margin compression and muted earnings growth in a cyclical sector. While fundamentals remain solid, recent growth has slowed, and the stock commands a rich valuation, suggesting a balanced risk/reward profile at current levels. Technical and sentiment cues further support a patient, wait-and-see approach.
Latest Earnings
Q4 2025 Earnings (Dec 31, 2025)
Earnings Per Share (EPS)
Actual
$1.27
Estimated
$1.29
Surprise
$-0.02
Surprise %
-1.55%
Revenue
Actual
$4.42B
Estimated
$4.44B
Surprise
-$14M
Surprise %
-0.32%
Historical Earnings
| Q4 2025 | Q3 2025 | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | Q1 2024 | |
|---|---|---|---|---|---|---|---|---|
| Earnings Per Share | ||||||||
| EPS (Actual) | $1.27 | $1.48 | $1.41 | $1.28 | $1.30 | $1.47 | $1.22 | $1.20 |
| EPS (Estimated) | $1.29 | $1.49 | $1.36 | $1.07 | $1.20 | $1.38 | $1.17 | $1.07 |
| EPS Surprise | -$0.02 | -$0.01 | +$0.05 | +$0.21 | +$0.10 | +$0.09 | +$0.05 | +$0.13 |
| % Diff | -1.6% | -0.7% | +3.7% | +19.6% | +8.3% | +6.5% | +4.3% | +12.1% |
| Revenue | ||||||||
| Revenue (Actual) | $4.42B | $4.74B | $4.45B | $4.07B | $4.01B | $4.15B | $3.82B | $3.66B |
| Revenue (Estimated) | $4.44B | $4.65B | $4.36B | $3.91B | $3.88B | $4.12B | $3.82B | $3.61B |
| Revenue Surprise | -$14M | +$96.63M | +$83.39M | +$161.17M | +$122.7M | +$31.28M | +$994.49K | +$47.33M |
| % Diff | -0.3% | +2.1% | +1.9% | +4.1% | +3.2% | +0.8% | +0.0% | +1.3% |
Valuation
Texas Instruments (TXN) currently trades at a valuation that suggests it is modestly undervalued relative to its intrinsic value and most peers within the semiconductor industry. Analysts generally have a Hold rating with a price target implying a moderate upside, reflecting confidence in the company’s stable earnings growth and strong free cash flow despite some near-term industry challenges. The valuation multiples show a premium compared to the broader sector but remain below high-growth peer averages, indicating a balanced risk-reward profile.
Valuation Metrics
Price to Earnings
TTM
Price to Sales
TTM
Price to Book
TTM
Enterprise Value to EBITDA
TTM
Enterprise Value to Revenue
TTM
| Q4 2025 | Q3 2025 | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | Q1 2024 | |
|---|---|---|---|---|---|---|---|---|
| Price to Earnings | 33.90 | 30.61 | 36.39 | 34.67 | 35.48 | 34.62 | 39.37 | 35.65 |
| Price to Sales | 35.66 | 35.22 | 42.38 | 40.19 | 42.68 | 45.43 | 46.44 | 43.04 |
| Price to Book | 9.69 | 10.04 | 11.49 | 9.97 | 10.12 | 10.92 | 10.31 | 9.28 |
| Enterprise Value to EBITDA | 82.06 | 79.28 | 95.37 | 93.95 | 95.04 | 96.11 | 107.23 | 95.59 |
| Enterprise Value to Revenue | 38.41 | 37.48 | 44.86 | 42.67 | 45.63 | 48.32 | 49.35 | 46.24 |
Sentiment & Analyst Ratings
The overall sentiment for Texas Instruments (TXN) is mixed but leaning towards cautious optimism. Analysts mostly recommend a Hold with moderate upside potential based on improving free cash flow and capacity expansion, although concerns remain about margin pressures and valuation. Retail sentiment reflects divided opinions with debates on valuation, growth prospects, and industry impact from AI.
Analyst Recommendations
Risk Assessment
Texas Instruments (TXN) demonstrates a robust financial position with strong liquidity and a moderately leveraged balance sheet, supporting its ability to withstand typical semiconductor industry cyclicality. However, the company faces several sector-specific risks including intense competition, geopolitical tensions, and market cyclicality which introduce uncertainty to its growth outlook. Despite these challenges, TXN's solid capital structure and cash flow generation reduce immediate financial distress risk.
Liquidity & Solvency
Current Ratio
Latest Quarter: Q4 2025
Quick Ratio
Latest Quarter: Q4 2025
Debt-to-Equity
Latest Quarter: Q4 2025
Debt-to-Assets
Latest Quarter: Q4 2025
| Q4 2025 | Q3 2025 | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | Q1 2024 | |
|---|---|---|---|---|---|---|---|---|
| Liquidity Metrics | ||||||||
| Current Ratio | 4.35 | 4.45 | 5.81 | 5.26 | 4.12 | 4.31 | 4.62 | 4.91 |
| Quick Ratio | 2.83 | 2.90 | 3.88 | 3.37 | 2.88 | 3.14 | 3.49 | 3.76 |
| Solvency Metrics | ||||||||
| Debt-to-Equity | 0.95 | 0.84 | 0.86 | 0.78 | 0.89 | 0.84 | 0.81 | 0.84 |
| Debt-to-Assets | 0.45 | 0.40 | 0.40 | 0.38 | 0.42 | 0.41 | 0.40 | 0.41 |
Liquidity Assessment
Current Ratio: 4.35(Strong)
Quick Ratio: 2.83(Strong)
The company has strong liquidity with sufficient short-term assets to cover liabilities.
Solvency Assessment
Debt-to-Equity: 0.95(Moderate)
Debt-to-Assets: 0.45(Moderate)
The company maintains a balanced capital structure with manageable debt levels.
Frequently Asked Questions about TXN
AI Answers: Common Questions About TXN
Get AI-powered answers to the questions investors ask most about Texas Instruments Incorporated
TXN is not a strong buy at current levels ($202.67) given its P/E of 37.2 (above sector average), margin compression, and a price near technical support but well below resistance. While long-term fundamentals are solid, the stock is fairly valued and better entry points may emerge if margins or demand improve.
There is no urgent reason to sell if you already own TXN, as fundamentals remain strong and technicals are stable. However, if you seek higher growth or are concerned about continued margin pressure and limited upside, trimming or reallocating may be considered.
The biggest risks are cyclical demand swings in semiconductors, margin compression (gross margin down to ~57%, net margin 28.3%), and geopolitical tensions (notably US-China). Moderate leverage (debt/equity ~0.95) and sector volatility also warrant caution.
Technical resistance is at $231 (52-week high), with support at $201 (50-day SMA) and $186–$190 (longer-term averages). Analyst price targets range from $185–$260, but most see fair value in the $175–$185 range, suggesting limited upside unless a breakout occurs.
TXN is fairly valued: its P/E (37.2) and EV/EBITDA are above the sector average but below high-growth peers, reflecting its stable cash flow and mature business. The price-to-book is elevated, but justified by asset efficiency and franchise strength.
Fundamentally, TXN is strong: it generates robust free cash flow, maintains high liquidity (current ratio >4.3), and has sector-leading margins, though these have compressed recently. EPS and revenue are rebounding but remain below pre-2024 highs.
Technically, TXN is in a bullish uptrend with a golden cross and price above key moving averages; RSI is neutral (38.4), and the next resistance is at $231. No major reversal patterns are present, but a breakout or breakdown from current levels will be key.
Key catalysts include upcoming earnings (especially margin and cash flow guidance), ramp-up of new manufacturing capacity, and macro events impacting semiconductor demand. Watch for management updates and sector-wide news on AI and industrial chip adoption.
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