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Can Texas Instruments' Analog Unit Extend Its Strong Sales Growth Run?
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Key Takeaways
TXN's analog revenues jumped 22% YoY to $3.92B in Q1'26, driving overall revenue growth.
Industrial revenues rose 30% YoY, and data center revenues surged 90% on AI power-chip demand.
Consensus pegs 2026 analog revenues at $1.64B ( 18% YoY), though TXN is cautious on H2 2026.
Texas Instruments Incorporated’s (TXN - Free Report) analog business is showing renewed strength, raising optimism about the company’s growth prospects for the rest of 2026. In the first quarter of 2026, analog revenues increased 22% year over year to $3.92 billion, making it the biggest contributor to the company’s overall revenue growth. The segment also generated an operating profit of $1.64 billion, up 36% from the year-ago quarter, highlighting strong operating leverage and healthy demand trends.
The recovery is being supported by improving industrial demand, stronger data center investments and stable automotive sales. Industrial revenues rose more than 30% year over year in the first quarter, with growth spreading across regions and customer groups. At the same time, Texas Instruments is benefiting from rising demand for power-management chips used in artificial intelligence (AI)-driven data center infrastructure. During the first-quarter earnings call, management stated that data center revenues surged roughly 90% year over year.
Texas Instruments’ manufacturing strategy is also supporting its analog expansion. The company has spent heavily over the past few years to build internal 300-millimeter wafer manufacturing capacity, helping it maintain stable lead times and support customers during periods of tight supply. This advantage could help the company gain additional market share as analog demand improves.
However, management remains cautious about the second half of 2026 due to macroeconomic uncertainty and uneven recovery trends in some markets. Still, strong industrial momentum and AI-related demand provide a favorable backdrop for continued growth across its analog business. The Zacks Consensus Estimate for the analog business’s 2026 revenues is pegged at $1.64 billion, indicating a year-over-year increase of approximately 18%.
How Texas Instruments Fares Against Rivals
Analog Devices, Inc. (ADI - Free Report) and ON Semiconductor Corporation (ON - Free Report) are among the major competitors of Texas Instruments.
Analog Devices has strong exposure to industrial automation, automotive electronics and data center power solutions. Analog Devices has been benefiting from rising AI infrastructure investments and growing demand for energy-efficient power chips. Its broad industrial customer base also gives it stability during market slowdowns. However, the company has recently faced softer automotive demand in parts of Europe and China, which could limit near-term growth momentum.
ON Semiconductor competes against Texas Instruments in automotive and industrial power semiconductors. ON Semiconductor has expanded aggressively in silicon carbide chips used in electric vehicles and energy infrastructure. The company is also gaining from the higher demand for AI-related power management solutions. However, weaker electric vehicle sales growth and inventory adjustments across the auto market have created pressure on near-term revenues. Despite this, ON Semiconductor continues to invest in manufacturing capacity and advanced power technologies to strengthen its competitive position against Texas Instruments in the analog market.
TXN’s Price Performance, Valuation and Estimates
Shares of Texas Instruments have soared 76.6% year to date compared with the Zacks Semiconductor - General industry’s rise of 28.4%.
Texas Instruments YTD Price Return Performance
Image Source: Zacks Investment Research
From a valuation standpoint, TXN trades at a forward price-to-earnings ratio of 37.96, significantly higher than the industry’s average of 28.56.
Texas Instruments Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Texas Instruments’ 2026 and 2027 earnings implies a year-over-year increase of 41.1% and 14.2%, respectively. Estimates for 2026 and 2027 have been revised upward in the past seven days.
View the Zacks #1 Rank List
Image: Bigstock
Can Texas Instruments' Analog Unit Extend Its Strong Sales Growth Run?
Key Takeaways
Texas Instruments Incorporated’s (TXN - Free Report) analog business is showing renewed strength, raising optimism about the company’s growth prospects for the rest of 2026. In the first quarter of 2026, analog revenues increased 22% year over year to $3.92 billion, making it the biggest contributor to the company’s overall revenue growth. The segment also generated an operating profit of $1.64 billion, up 36% from the year-ago quarter, highlighting strong operating leverage and healthy demand trends.
The recovery is being supported by improving industrial demand, stronger data center investments and stable automotive sales. Industrial revenues rose more than 30% year over year in the first quarter, with growth spreading across regions and customer groups. At the same time, Texas Instruments is benefiting from rising demand for power-management chips used in artificial intelligence (AI)-driven data center infrastructure. During the first-quarter earnings call, management stated that data center revenues surged roughly 90% year over year.
Texas Instruments’ manufacturing strategy is also supporting its analog expansion. The company has spent heavily over the past few years to build internal 300-millimeter wafer manufacturing capacity, helping it maintain stable lead times and support customers during periods of tight supply. This advantage could help the company gain additional market share as analog demand improves.
However, management remains cautious about the second half of 2026 due to macroeconomic uncertainty and uneven recovery trends in some markets. Still, strong industrial momentum and AI-related demand provide a favorable backdrop for continued growth across its analog business. The Zacks Consensus Estimate for the analog business’s 2026 revenues is pegged at $1.64 billion, indicating a year-over-year increase of approximately 18%.
How Texas Instruments Fares Against Rivals
Analog Devices, Inc. (ADI - Free Report) and ON Semiconductor Corporation (ON - Free Report) are among the major competitors of Texas Instruments.
Analog Devices has strong exposure to industrial automation, automotive electronics and data center power solutions. Analog Devices has been benefiting from rising AI infrastructure investments and growing demand for energy-efficient power chips. Its broad industrial customer base also gives it stability during market slowdowns. However, the company has recently faced softer automotive demand in parts of Europe and China, which could limit near-term growth momentum.
ON Semiconductor competes against Texas Instruments in automotive and industrial power semiconductors. ON Semiconductor has expanded aggressively in silicon carbide chips used in electric vehicles and energy infrastructure. The company is also gaining from the higher demand for AI-related power management solutions. However, weaker electric vehicle sales growth and inventory adjustments across the auto market have created pressure on near-term revenues. Despite this, ON Semiconductor continues to invest in manufacturing capacity and advanced power technologies to strengthen its competitive position against Texas Instruments in the analog market.
TXN’s Price Performance, Valuation and Estimates
Shares of Texas Instruments have soared 76.6% year to date compared with the Zacks Semiconductor - General industry’s rise of 28.4%.
Texas Instruments YTD Price Return Performance
Image Source: Zacks Investment Research
From a valuation standpoint, TXN trades at a forward price-to-earnings ratio of 37.96, significantly higher than the industry’s average of 28.56.
Texas Instruments Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Texas Instruments’ 2026 and 2027 earnings implies a year-over-year increase of 41.1% and 14.2%, respectively. Estimates for 2026 and 2027 have been revised upward in the past seven days.
Image Source: Zacks Investment Research
Texas Instruments currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.