Texas Instruments Incorporated TXN is likely to beat earnings estimates when it releases its second-quarter 2026 results on July 22, after market close.
The company anticipates revenues between $5 billion and $5.4 billion for the second quarter. The Zacks Consensus Estimate is pegged at $5.23 billion, suggesting growth of 17.5% from the year-ago period's reported figure.
Texas Instruments expects earnings per share between $1.77 and $2.05. The Zacks Consensus Estimate for second-quarter earnings is pinned at $1.91 per share, implying growth of 35.5% from the year-ago period's reported figure. The consensus mark for earnings has been revised upward over the past seven days.
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TXN’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters while missing once, with an average surprise of 6.96%.
Texas Instruments Incorporated Price and EPS Surprise
Texas Instruments Incorporated price-eps-surprise | Texas Instruments Incorporated Quote
Q2 Earnings Whispers for Texas Instruments
Our proven model predicts an earnings beat for Texas Instruments this earnings season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is exactly the case here.
Earnings ESP of TXN: Earnings ESP, which represents the difference between the Most Accurate Estimate ($1.96) and the Zacks Consensus Estimate ($1.91), is +2.66%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Texas Instruments’ Zacks Rank: TXN presently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors Likely to Influence TXN’s Q2 Results
Texas Instruments’ second-quarter performance is likely to have benefited from strong demand for its analog and embedded chips. The company’s analog business remains the largest contributor, which is showing renewed strength 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 of 2026, 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.
Overall, analog revenues increased 22% year over year to $3.92 billion, and the trend is likely to have continued in the second quarter. Our model estimates for the analog division’s second-quarter revenues are pegged at $4.08 billion, indicating 18.1% year-over-year growth.
Gradually improving end-market demand and easing customer inventory adjustments are likely to have aided growth in the embedded processing business during the second quarter. The segment is anticipated to have benefited from improving industrial demand and increasing semiconductor content across connected devices, vehicles and factory automation.
In the first quarter, embedded processing revenues increased 12% year over year to $723 million. The growth rate is likely to have accelerated in the second quarter. Our model estimates for the embedded processing division’s second-quarter revenues are pegged at $799 million, indicating 17.7% year-over-year growth.
However, Texas Instruments’ second-quarter performance is likely to have been affected by rising geopolitical tensions, and the ongoing U.S.-China trade and tariff wars. TXN is a major player in China, accounting for more than 20% of its annual revenues in 2025.
TXN’s Stock Price Performance & Valuation
Texas Instruments shares have surged 68.3% year to date, outperforming the Zacks Semiconductor – General industry, which has risen 22.7%. Compared to other industry peers, the stock has outpaced NVIDIA Corporation NVDA and Amtech Systems, Inc. ASYS but has underperformed Intel Corporation INTC. Shares of NVIDIA, Amtech Systems and Intel have soared 11%, 33.2% and 162.3%, respectively.
Texas Instruments YTD Price Return Performance
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Let us look at the value Texas Instruments offers investors at current levels. Currently, TXN is trading at a premium, with a forward 12-month P/E of 35.26X compared with the industry’s 22.94X.
Texas Instruments Forward 12-Month P/E Ratio
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Compared with semiconductor giants, the stock trades at a higher multiple than NVIDIA and Amtech Systems, while at a lower multiple than Intel. At present, NVIDIA, Amtech Systems and Intel have forward 12-month P/E of 19.63X, 23.87X and 76.49X, respectively.
Investment Thesis on TXN Stock
Unlike NVIDIA or AMD, Texas Instruments does not build AI accelerators. Instead, it supplies the analog and embedded chips that keep AI infrastructure running. Its products manage power, convert signals, control motors, regulate cooling systems and enable connectivity across data centers, industrial equipment and automotive applications. These components may receive less attention than AI processors, but they are essential as AI servers become more power-hungry and increasingly complex.
Every new AI data center requires far more power management and sensing components than traditional computing infrastructure. This is creating a meaningful opportunity for Texas Instruments. Rather than competing in the crowded AI processor market, the company is benefiting from the broader AI infrastructure buildout — a trend that could prove more durable over time.
The company's data center business reached an annual revenue run rate of roughly $1.2 billion in 2025, growing more than 50% year over year. In the first quarter of 2026, data center revenues jumped 90% from the prior-year period and increased 25% sequentially. These growth rates highlight the company’s growing importance in AI infrastructure and suggest that this market could remain a major contributor for years.
Texas Instruments is also taking a different approach to manufacturing than many semiconductor companies. Instead of relying heavily on external foundries, management plans to manufacture more than 95% of its wafers internally by 2030.
This strategy requires significant investment today but offers several long-term advantages. Greater manufacturing control can improve supply-chain reliability, reduce production costs over time and protect margins during industry shortages.
Conclusion: Hold Texas Instruments Stock for Now
TXN is benefiting from rising AI infrastructure spending, rapidly expanding data center demand and a manufacturing strategy that should continue aiding its financial results. With AI infrastructure spending still in the early stages of a multi-year expansion cycle, Texas Instruments looks well-positioned to deliver steady growth for years to come. Although the stock trades at a premium valuation, that premium appears justified, given its consistent earnings growth. All these make Texas Instruments stock worth holding.
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This article originally published on Zacks Investment Research (zacks.com).