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ADI vs. TXN: Which AI Semiconductor Stock is a Better Buy Right Now?
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Key Takeaways
Analog Devices posted 30% revenue growth, driven by AI infrastructure and data center demand.
TXN's data center revenues surged 90% year over year in first-quarter 2026.
Texas Instruments' manufacturing scale and power solutions strengthen its AI data center position.
Analog Devices (ADI - Free Report) and Texas Instruments (TXN - Free Report) are two prominent players in the AI semiconductor space, offering solutions that are crucial for AI data centers and high performance computing. Both companies have been key beneficiaries of the artificial intelligence (AI) boom, which has driven strong demand for its analog and embedded chips used across data centers, industrial customers and automotive markets.
As the demand for analog and embedded chips supporting AI and high-performance computing is likely to remain strong, ADI and TXN are well-positioned to capitalize on this opportunity. However, from an investment point of view, one stock offers a more favorable outlook than the other right now. Let’s break down their fundamentals, growth prospects, market challenges and valuation to determine which stock offers a more compelling investment case.
The Case for ADI Stock
Analog Devices started fiscal 2026 with strong momentum, posting revenues of $3.16 billion, up 30% year over year, and delivering growth across all end markets. Industrial and communications led the quarter as AI infrastructure, data center buildouts and cyclical improvement continued to support demand.
ADI’s industrial revenues rose 38% year over year, communications climbed 63%, consumer increased 27% and automotive advanced 8%. The strength in automated test equipment and data center applications is driving ADI’s top line. while electro-optical interfaces, precision power management, protection and monitoring continued to benefit from the shift from 800G toward 1.6T networks.
ADI’s data center business has been growing in double digits year over year for the past four quarters. The company expects AI-driven advancements, including the development of more capable and content-rich humanoid robots, to create significant long-term growth opportunities and further strengthen ADI’s position in the robotics market.
Adoption of higher-voltage architectures, mainly 48V and 54V, and vertical power is expanding its serviceable market, while DC power control and multiphase controllers enable efficient GPU and CPU power regulation. Optical connectivity is another tailwind as AI networking shifts toward optical circuit switching. ADI’s precision control and monitoring solutions help improve bandwidth density and reduce cost per bit.
For the second quarter of fiscal 2026, ADI expects revenues of $3.5 billion (+/- $100 million) and adjusted EPS of $2.88. The consensus estimate for earnings is pegged at $2.96 per share, indicating year-over year growth of 44.4%. Estimates for second-quarter fiscal 2026 earnings have remained unchanged for the past 60 days.
Image Source: Zacks Investment Research
The Case for TXN Stock
Texas Instruments is seeing rising momentum in the data center market, which has become an important growth driver for the company. During its first-quarter earnings call, management stated that revenue growth was led by industrial and data center demand. This is a positive sign because data centers are expanding rapidly as cloud computing, AI and enterprise workloads continue to grow.
Texas Instruments does not compete directly in high-end AI graphics processors. Instead, it supplies analog and embedded chips that are essential for data center infrastructure. These chips help manage power delivery, battery backup systems, cooling equipment, motor controls, signal conversion and server connectivity. As modern data centers become larger and more power-intensive, the need for efficient power management solutions increases.
In 2025, Texas Instruments’ data center business reached an annual run rate of about $1.2 billion, growing more than 50% year over year. In the first quarter of 2026, revenues from the data center end market surged 90% year over year and 25% sequentially. As cloud and AI workloads continue to rise, Texas Instruments’ strong portfolio and manufacturing scale position it well to benefit from sustained demand for efficient, high-performance power solutions in data center infrastructure.
TXN calls for second-quarter 2026 revenues in the range of $5.00-$5.40 billion. The Zacks Consensus Estimate for revenues is pegged at $5.22 billion, indicating year-over year growth of 17.4%. The company expects earnings per share between $1.77 and $2.05. The Zacks Consensus Estimate for earnings is pegged at $1.92, indicating year-over year growth of 36%. Estimates for second-quarter 2026 earnings have been revised upward in the past 30 days.
Image Source: Zacks Investment Research
Stock Price Performance and Valuation of ADI & TXN
Year to date, TXN shares have gained 75.7% compared with the surge of 46.8% in ADI shares.
YTD Price Performance
Image Source: Zacks Investment Research
ADI is trading at a forward sales multiple of 13.31X, above its median of 10.48X over the past year. TXN’s forward sales multiple sits at 12.90X, significantly above its median of 9.17X over the past year.
Forward 12-Month (P/S) Valuation Chart
Image Source: Zacks Investment Research
Conclusion: ADI vs. TXN
While both Analog Devices and Texas Instruments are benefiting from the AI-driven expansion in data centers, industrial automation and high-performance computing, TXN currently appears to be the better investment choice. Texas Instruments is demonstrating stronger momentum in AI infrastructure-related demand, particularly in data centers, where revenues surged 90% year over year in the first quarter of 2026. TXN also benefits from its unmatched manufacturing scale and internal production capabilities, which provide better supply chain control, cost efficiencies and long-term margin advantages. Given these factors, we suggest TXN to be a better buy than ADI right now.
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Image: Bigstock
ADI vs. TXN: Which AI Semiconductor Stock is a Better Buy Right Now?
Key Takeaways
Analog Devices (ADI - Free Report) and Texas Instruments (TXN - Free Report) are two prominent players in the AI semiconductor space, offering solutions that are crucial for AI data centers and high performance computing. Both companies have been key beneficiaries of the artificial intelligence (AI) boom, which has driven strong demand for its analog and embedded chips used across data centers, industrial customers and automotive markets.
As the demand for analog and embedded chips supporting AI and high-performance computing is likely to remain strong, ADI and TXN are well-positioned to capitalize on this opportunity. However, from an investment point of view, one stock offers a more favorable outlook than the other right now. Let’s break down their fundamentals, growth prospects, market challenges and valuation to determine which stock offers a more compelling investment case.
The Case for ADI Stock
Analog Devices started fiscal 2026 with strong momentum, posting revenues of $3.16 billion, up 30% year over year, and delivering growth across all end markets. Industrial and communications led the quarter as AI infrastructure, data center buildouts and cyclical improvement continued to support demand.
ADI’s industrial revenues rose 38% year over year, communications climbed 63%, consumer increased 27% and automotive advanced 8%. The strength in automated test equipment and data center applications is driving ADI’s top line. while electro-optical interfaces, precision power management, protection and monitoring continued to benefit from the shift from 800G toward 1.6T networks.
ADI’s data center business has been growing in double digits year over year for the past four quarters. The company expects AI-driven advancements, including the development of more capable and content-rich humanoid robots, to create significant long-term growth opportunities and further strengthen ADI’s position in the robotics market.
Adoption of higher-voltage architectures, mainly 48V and 54V, and vertical power is expanding its serviceable market, while DC power control and multiphase controllers enable efficient GPU and CPU power regulation. Optical connectivity is another tailwind as AI networking shifts toward optical circuit switching. ADI’s precision control and monitoring solutions help improve bandwidth density and reduce cost per bit.
For the second quarter of fiscal 2026, ADI expects revenues of $3.5 billion (+/- $100 million) and adjusted EPS of $2.88. The consensus estimate for earnings is pegged at $2.96 per share, indicating year-over year growth of 44.4%. Estimates for second-quarter fiscal 2026 earnings have remained unchanged for the past 60 days.
Image Source: Zacks Investment Research
The Case for TXN Stock
Texas Instruments is seeing rising momentum in the data center market, which has become an important growth driver for the company. During its first-quarter earnings call, management stated that revenue growth was led by industrial and data center demand. This is a positive sign because data centers are expanding rapidly as cloud computing, AI and enterprise workloads continue to grow.
Texas Instruments does not compete directly in high-end AI graphics processors. Instead, it supplies analog and embedded chips that are essential for data center infrastructure. These chips help manage power delivery, battery backup systems, cooling equipment, motor controls, signal conversion and server connectivity. As modern data centers become larger and more power-intensive, the need for efficient power management solutions increases.
In 2025, Texas Instruments’ data center business reached an annual run rate of about $1.2 billion, growing more than 50% year over year. In the first quarter of 2026, revenues from the data center end market surged 90% year over year and 25% sequentially. As cloud and AI workloads continue to rise, Texas Instruments’ strong portfolio and manufacturing scale position it well to benefit from sustained demand for efficient, high-performance power solutions in data center infrastructure.
TXN calls for second-quarter 2026 revenues in the range of $5.00-$5.40 billion. The Zacks Consensus Estimate for revenues is pegged at $5.22 billion, indicating year-over year growth of 17.4%. The company expects earnings per share between $1.77 and $2.05. The Zacks Consensus Estimate for earnings is pegged at $1.92, indicating year-over year growth of 36%. Estimates for second-quarter 2026 earnings have been revised upward in the past 30 days.
Image Source: Zacks Investment Research
Stock Price Performance and Valuation of ADI & TXN
Year to date, TXN shares have gained 75.7% compared with the surge of 46.8% in ADI shares.
YTD Price Performance
Image Source: Zacks Investment Research
ADI is trading at a forward sales multiple of 13.31X, above its median of 10.48X over the past year. TXN’s forward sales multiple sits at 12.90X, significantly above its median of 9.17X over the past year.
Forward 12-Month (P/S) Valuation Chart
Image Source: Zacks Investment Research
Conclusion: ADI vs. TXN
While both Analog Devices and Texas Instruments are benefiting from the AI-driven expansion in data centers, industrial automation and high-performance computing, TXN currently appears to be the better investment choice. Texas Instruments is demonstrating stronger momentum in AI infrastructure-related demand, particularly in data centers, where revenues surged 90% year over year in the first quarter of 2026. TXN also benefits from its unmatched manufacturing scale and internal production capabilities, which provide better supply chain control, cost efficiencies and long-term margin advantages. Given these factors, we suggest TXN to be a better buy than ADI right now.
While TXN sports a Zacks Rank #1 (Strong Buy), ADI carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.