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TXN's AI Infrastructure Push Grows: Can It Boost Revenues Further?
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Key Takeaways
TXN's data center business rose ~90% YoY and 25% sequentially as Q1 2026 revenue hit $4.8B.
AI server racks use thousands of analog/power chips, letting TXN sell beyond a single specialty product.
TXN sees 2H 2026-2027 upside in VRMs, high-voltage conversion and GaN, backed by internal supply.
Texas Instruments (TXN - Free Report) is experiencing strong momentum from artificial intelligence (AI) infrastructure and data center demand, which is emerging as an important contributor to revenue growth. During the first quarter of 2026, the company’s data center business revenues grew about 90% year over year and more than 25% sequentially, making it one of the fastest-growing segments in its portfolio. The company generated $4.83 billion in revenues in the first quarter of 2026, reflecting 19% year-over-year growth and a 9% sequential increase.
The robust growth was driven by rising power requirements in AI-focused data centers. Advanced AI servers and graphics processing units (GPUs) require increasingly complex power delivery systems, creating demand for analog semiconductors and power management solutions. Texas Instruments indicated that power density and energy delivery are becoming critical areas across modern AI infrastructure.
Beyond specialized chips, the company also benefits from supplying a broad range of general-purpose analog components used throughout AI server racks. These systems contain thousands of analog and power-related semiconductors, enabling Texas Instruments to participate across multiple layers of the infrastructure buildout rather than relying on a single product category.
Texas Instruments also highlighted growing opportunities in application-specific power solutions, including voltage regulation modules, high-voltage power conversion technologies and gallium nitride-based products. The company expects momentum in these areas to strengthen further during the second half of 2026 and into 2027, as AI infrastructure deployments continue expanding.
Another key advantage is the company’s internal manufacturing and supply capabilities. During the last earnings call, Texas Instruments stated that its broad product portfolio, stable lead times, inventory position and North American manufacturing footprint are helping it support customers consistently amid the current tight industry supply environment. As AI-driven data center investments continue to grow, these advantages could help the company further expand its sales in the infrastructure market. The Zacks Consensus Estimate for the company’s 2026 revenues is pegged at $20.75 billion, indicating a year-over-year increase of approximately 17.4%.
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. ADI has been benefiting from rising AI infrastructure investments and growing demand for energy-efficient power chips. Its broad industrial customer base also provides 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 with Texas Instruments in automotive and industrial power semiconductors. ON 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.
TXN’s Price Performance, Valuation and Estimates
Shares of Texas Instruments have increased 75.7% year to date compared with the Zacks Semiconductor - General industry’s 27.5% growth.
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 37.59, significantly higher than the industry’s average of 28.16.
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 30 days.
View the Zacks #1 Rank List
Image: Bigstock
TXN's AI Infrastructure Push Grows: Can It Boost Revenues Further?
Key Takeaways
Texas Instruments (TXN - Free Report) is experiencing strong momentum from artificial intelligence (AI) infrastructure and data center demand, which is emerging as an important contributor to revenue growth. During the first quarter of 2026, the company’s data center business revenues grew about 90% year over year and more than 25% sequentially, making it one of the fastest-growing segments in its portfolio. The company generated $4.83 billion in revenues in the first quarter of 2026, reflecting 19% year-over-year growth and a 9% sequential increase.
The robust growth was driven by rising power requirements in AI-focused data centers. Advanced AI servers and graphics processing units (GPUs) require increasingly complex power delivery systems, creating demand for analog semiconductors and power management solutions. Texas Instruments indicated that power density and energy delivery are becoming critical areas across modern AI infrastructure.
Beyond specialized chips, the company also benefits from supplying a broad range of general-purpose analog components used throughout AI server racks. These systems contain thousands of analog and power-related semiconductors, enabling Texas Instruments to participate across multiple layers of the infrastructure buildout rather than relying on a single product category.
Texas Instruments also highlighted growing opportunities in application-specific power solutions, including voltage regulation modules, high-voltage power conversion technologies and gallium nitride-based products. The company expects momentum in these areas to strengthen further during the second half of 2026 and into 2027, as AI infrastructure deployments continue expanding.
Another key advantage is the company’s internal manufacturing and supply capabilities. During the last earnings call, Texas Instruments stated that its broad product portfolio, stable lead times, inventory position and North American manufacturing footprint are helping it support customers consistently amid the current tight industry supply environment. As AI-driven data center investments continue to grow, these advantages could help the company further expand its sales in the infrastructure market. The Zacks Consensus Estimate for the company’s 2026 revenues is pegged at $20.75 billion, indicating a year-over-year increase of approximately 17.4%.
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. ADI has been benefiting from rising AI infrastructure investments and growing demand for energy-efficient power chips. Its broad industrial customer base also provides 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 with Texas Instruments in automotive and industrial power semiconductors. ON 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.
TXN’s Price Performance, Valuation and Estimates
Shares of Texas Instruments have increased 75.7% year to date compared with the Zacks Semiconductor - General industry’s 27.5% growth.
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 37.59, significantly higher than the industry’s average of 28.16.
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 30 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.