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TXN's Data Center Sales Double: Will This Growth Rate Continue in 2026?
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Key Takeaways
Texas Instruments' data center revenues doubled year over year and rose about 20% sequentially in Q2'26.
TXN expects to outgrow the data center market in 2026, backed by R&D investments and supply capacity.
Texas Instruments sees 800-volt architectures boosting analog and embedded chip content in data centers.
Texas Instruments Incorporated (TXN - Free Report) is gaining momentum in data center semiconductors as artificial intelligence (AI) infrastructure spending increases. In the second quarter of 2026, TXN’s data center revenues doubled year over year and increased about 20% sequentially. This helped make data center one of the company’s three strongest growth markets, alongside industrial and automotive.
The key question is whether Texas Instruments can maintain such rapid growth through the rest of 2026. Management sees a strong opportunity ahead. CEO Haviv Ilan said during the earnings call that the company expects to outgrow the data center market in 2026, supported by its research and development investments and ability to supply customers. TXN also believes its reliable manufacturing capacity can become a competitive advantage as data center demand expands.
The shift toward higher-voltage power systems could expand the opportunity. The industry is moving toward 800-volt architectures, which can require several power-conversion stages. Texas Instruments expects this transition to increase the amount of analog and embedded content used in data centers, creating more opportunities for its chips.
TXN is also investing to meet the growing demand. During the last earnings call, management stated that the company has clean-room capacity available and plans to equip facilities as needed. This should help it respond quickly if demand remains strong.
Sustaining a 100% growth rate may be difficult as the data center business gets larger. Still, strong AI spending, rising chip content and Texas Instruments’ capacity position suggest this market could remain an important growth engine through 2026 and beyond.
ADI and ON: Can Their Data Center Growth Rival TXN?
Analog Devices, Inc. (ADI - Free Report) is a key competitor to Texas Instruments in data center power and signal solutions. In the third quarter of fiscal 2026, ADI’s revenues jumped 40% year over year to $4.02 billion.
Analog Devices’ communications revenues surged 84%, with data center identified as the main growth driver, supported by AI infrastructure spending. ADI also generated $4.9 billion in trailing-12-month free cash flow, giving it room to invest in this opportunity.
ON Semiconductor (ON - Free Report) is another important rival, especially in power semiconductors used in AI data centers. In the second quarter of 2026, the company revealed that its AI data center revenues grew more than 30% sequentially and more than doubled year over year. The company’s total revenues increased 9.2% to $1.6 billion.
AI data center remains ON Semiconductor’s fastest-growing market, and management now expects 2026 revenues to more than double year over year. The company expanded its role in the NVIDIA MGX ecosystem, secured two power-supply platform wins with Great Wall and added design wins supporting AWS power supply and battery backup systems. Management expects AI data center SiC revenues to grow nearly 60% in 2026 as power requirements rise and architectures move toward 800-volt DC distribution. This broadens ON Semiconductor’s opportunity from high-voltage infrastructure through low-voltage power delivery.
Analog Devices shows strong data center momentum, while ON Semiconductor benefits from AI power demand. TXN’s broad analog portfolio and manufacturing capacity could help it remain competitive as AI infrastructure spending expands.
TXN’s Price Performance, Valuation and Estimates
Shares of Texas Instruments have rallied 51.9% year to date compared with the Zacks Semiconductor - General industry’s 20.2% 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 27.84, significantly higher than the industry’s average of 17.68.
Texas Instruments Forward 12-Month P/E Ratio
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Texas Instruments’ 2026 and 2027 earnings implies a year-over-year increase of 55.1% and 16.8%, respectively. Estimates for 2026 and 2027 have been revised upward over the past 60 days.
View the Zacks #1 Rank List
Image: Shutterstock
TXN's Data Center Sales Double: Will This Growth Rate Continue in 2026?
Key Takeaways
Texas Instruments Incorporated (TXN - Free Report) is gaining momentum in data center semiconductors as artificial intelligence (AI) infrastructure spending increases. In the second quarter of 2026, TXN’s data center revenues doubled year over year and increased about 20% sequentially. This helped make data center one of the company’s three strongest growth markets, alongside industrial and automotive.
The key question is whether Texas Instruments can maintain such rapid growth through the rest of 2026. Management sees a strong opportunity ahead. CEO Haviv Ilan said during the earnings call that the company expects to outgrow the data center market in 2026, supported by its research and development investments and ability to supply customers. TXN also believes its reliable manufacturing capacity can become a competitive advantage as data center demand expands.
The shift toward higher-voltage power systems could expand the opportunity. The industry is moving toward 800-volt architectures, which can require several power-conversion stages. Texas Instruments expects this transition to increase the amount of analog and embedded content used in data centers, creating more opportunities for its chips.
TXN is also investing to meet the growing demand. During the last earnings call, management stated that the company has clean-room capacity available and plans to equip facilities as needed. This should help it respond quickly if demand remains strong.
Sustaining a 100% growth rate may be difficult as the data center business gets larger. Still, strong AI spending, rising chip content and Texas Instruments’ capacity position suggest this market could remain an important growth engine through 2026 and beyond.
ADI and ON: Can Their Data Center Growth Rival TXN?
Analog Devices, Inc. (ADI - Free Report) is a key competitor to Texas Instruments in data center power and signal solutions. In the third quarter of fiscal 2026, ADI’s revenues jumped 40% year over year to $4.02 billion.
Analog Devices’ communications revenues surged 84%, with data center identified as the main growth driver, supported by AI infrastructure spending. ADI also generated $4.9 billion in trailing-12-month free cash flow, giving it room to invest in this opportunity.
ON Semiconductor (ON - Free Report) is another important rival, especially in power semiconductors used in AI data centers. In the second quarter of 2026, the company revealed that its AI data center revenues grew more than 30% sequentially and more than doubled year over year. The company’s total revenues increased 9.2% to $1.6 billion.
AI data center remains ON Semiconductor’s fastest-growing market, and management now expects 2026 revenues to more than double year over year. The company expanded its role in the NVIDIA MGX ecosystem, secured two power-supply platform wins with Great Wall and added design wins supporting AWS power supply and battery backup systems. Management expects AI data center SiC revenues to grow nearly 60% in 2026 as power requirements rise and architectures move toward 800-volt DC distribution. This broadens ON Semiconductor’s opportunity from high-voltage infrastructure through low-voltage power delivery.
Analog Devices shows strong data center momentum, while ON Semiconductor benefits from AI power demand. TXN’s broad analog portfolio and manufacturing capacity could help it remain competitive as AI infrastructure spending expands.
TXN’s Price Performance, Valuation and Estimates
Shares of Texas Instruments have rallied 51.9% year to date compared with the Zacks Semiconductor - General industry’s 20.2% 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 27.84, significantly higher than the industry’s average of 17.68.
Texas Instruments Forward 12-Month P/E Ratio
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Texas Instruments’ 2026 and 2027 earnings implies a year-over-year increase of 55.1% and 16.8%, respectively. Estimates for 2026 and 2027 have been revised upward over the past 60 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.