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Buy Texas Instruments as a Momentum Play After Solid Q2 2026 Earnings
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Key Takeaways
TXN topped Q2 2026 revenues and earnings estimates as margins and EPS climbed year over year.
TXN expects Q3 revenues of $5.65-$6.15 billion and EPS of $2.23-$2.57 with a 13% tax rate.
TXN is benefiting from AI data center demand and its analog and embedded chip portfolio across key markets.
Texas Instruments Inc. (TXN - Free Report) — a major original equipment manufacturer of analog, mixed-signal and digital signal processing integrated circuits — reported strong second-quarter 2026 earnings results, easily surpassing the Zacks Consensus Estimate with respect to both the top and bottom lines.
TXN continues to deliver robust profitability improvement. Gross margin reached 61.4% from 57.9% in the year-ago quarter, while operating margin expanded to 42.3% from 35.1%. Driven by higher revenues and improved margins, second-quarter earnings per share jumped 52% year over year.
Texas Instruments is benefiting from solid AI-powered data center demand, which is boosting its prospects in the enterprise systems market. As AI infrastructure scales from data centers to edge devices, vehicles, and industrial systems, TXN’s chips are becoming critical components in the broader buildout.
The chart below shows the price performance of TXN year to date.
Image Source: Zacks Investment Research
Robust Product Portfolio
TXN has a strong position in the foundational analog and embedded processing semiconductor markets, which are critical for long-term growth in key industries like industrial, automotive, personal electronics and AI data centers.
As cloud and AI workloads continue to rise, TXN’s strong portfolio and manufacturing scale position it well to benefit from sustained demand for efficient, high-performance power solutions in data center infrastructure.
TXN provides supplies foundational analog, power management and edge-processing semiconductors to corporate bigwigs like NVIDIA Corp. (NVDA - Free Report) , Apple Inc. (AAPL - Free Report) , Ford Motor Co. (F - Free Report) and Medtronic plc (MDT - Free Report) , to name a few.
Strong Guidance
TXN’s outlook calls for third-quarter 2026 revenues in the range of $5.65-$6.15 billion. The company expects earnings per share between $2.23 and $2.57. Management expects an effective tax rate of about 13% in the third quarter.
Solid Estimate Revisions
Texas Instruments has an expected revenue and earnings growth rate of 20.4% and 49.9%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 6.4% over the last seven days.
TXN has an expected revenue and earnings growth rate of 11.6% and 15.2%, respectively, for the next year. The Zacks Consensus Estimate for next year’s earnings has improved 6.6% over the last seven days.
The short-term average price target of brokerage firms represents an increase of 13.7% from the last closing price of $279.41. The brokerage target price is currently in the range of $215-$400. This indicates a maximum upside of 43.2% and a maximum downside of 23.1%. The risk/reward ratio is a highly favorable 1:87.
View the Zacks #1 Rank List
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Buy Texas Instruments as a Momentum Play After Solid Q2 2026 Earnings
Key Takeaways
Texas Instruments Inc. (TXN - Free Report) — a major original equipment manufacturer of analog, mixed-signal and digital signal processing integrated circuits — reported strong second-quarter 2026 earnings results, easily surpassing the Zacks Consensus Estimate with respect to both the top and bottom lines.
TXN continues to deliver robust profitability improvement. Gross margin reached 61.4% from 57.9% in the year-ago quarter, while operating margin expanded to 42.3% from 35.1%. Driven by higher revenues and improved margins, second-quarter earnings per share jumped 52% year over year.
Texas Instruments is benefiting from solid AI-powered data center demand, which is boosting its prospects in the enterprise systems market. As AI infrastructure scales from data centers to edge devices, vehicles, and industrial systems, TXN’s chips are becoming critical components in the broader buildout.
The chart below shows the price performance of TXN year to date.
Image Source: Zacks Investment Research
Robust Product Portfolio
TXN has a strong position in the foundational analog and embedded processing semiconductor markets, which are critical for long-term growth in key industries like industrial, automotive, personal electronics and AI data centers.
As cloud and AI workloads continue to rise, TXN’s strong portfolio and manufacturing scale position it well to benefit from sustained demand for efficient, high-performance power solutions in data center infrastructure.
TXN provides supplies foundational analog, power management and edge-processing semiconductors to corporate bigwigs like NVIDIA Corp. (NVDA - Free Report) , Apple Inc. (AAPL - Free Report) , Ford Motor Co. (F - Free Report) and Medtronic plc (MDT - Free Report) , to name a few.
Strong Guidance
TXN’s outlook calls for third-quarter 2026 revenues in the range of $5.65-$6.15 billion. The company expects earnings per share between $2.23 and $2.57. Management expects an effective tax rate of about 13% in the third quarter.
Solid Estimate Revisions
Texas Instruments has an expected revenue and earnings growth rate of 20.4% and 49.9%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 6.4% over the last seven days.
TXN has an expected revenue and earnings growth rate of 11.6% and 15.2%, respectively, for the next year. The Zacks Consensus Estimate for next year’s earnings has improved 6.6% over the last seven days.
Image Source: Zacks Investment Research
Impressive Price Upside Potential
Texas Instruments sports a Zacks Rank #1 (Strong Buy) at present and has a Zacks Momentum Score of A. You can see the complete list of today’s Zacks #1 Rank stocks here.
The short-term average price target of brokerage firms represents an increase of 13.7% from the last closing price of $279.41. The brokerage target price is currently in the range of $215-$400. This indicates a maximum upside of 43.2% and a maximum downside of 23.1%. The risk/reward ratio is a highly favorable 1:87.
Image Source: Zacks Investment Research