Think It’s Too Late to Buy Texas Instruments? Here’s the Case for Getting In Now
Think It’s Too Late to Buy Texas Instruments? Here’s the Case for Getting In Now
Trey ThoelckeFri, April 24, 2026 at 11:05 AM UTC
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After Texas Instruments (TXN) stock’s recent run to a new all-time high, is there anything left on the table, or did the easy money already leave the station?
With free cash flow inflecting, capex rolling over, a reliable dividend, and an analog cycle that just confirmed its turn, the setup still favors patient, retirement-focused investors seeking income and a long runway.
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Texas Instruments (NASDAQ: TXN) stock has climbed from roughly $162.74 per share in October 2025 to $236.31 at its Q1 FY26 filing on April 22, 2026, a roughly six-month run that pushed the analog giant to a multi-year high and a market cap near $256.96 billion. For investors who watched it happen and did nothing, the question stinging right now is the obvious one: is there anything left on the table, or did the easy money already leave the station? Let's work through it honestly.
Valuation: Expensive, but Earnings Are Accelerating Into It
Texas Instruments trades at roughly 43x trailing earnings on FY2025 EPS of $5.45. That is a premium multiple for a cyclical analog chipmaker, and there is no way to dress it up otherwise. The offset is that earnings are rising faster than the price. Q1 FY26 delivered revenue of $4.83 billion, up 18.6% year over year, beating the $4.53 billion consensus, with diluted EPS of $1.68, beating the $1.36 consensus estimate. Q2 guidance calls for revenue of $5.00 billion to $5.40 billion and EPS of $1.77 to $2.05. Running the forward numbers suggests the multiple compresses meaningfully for 2026. Investors are paying up, but they are paying up for visibly accelerating profitability.
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Forward Catalyst: The Analog Cycle Turned
The cycle-recovery thesis shows up clearly in the segment data. Analog revenue hit $3.92 billion, up 22% year over year, with operating profit up 36%. Embedded Processing grew 12% with operating profit up 205%. CEO Haviv Ilan told investors, "Revenue increased 9% sequentially and 19% from the same quarter a year ago with growth led by industrial and data center." Capex is moderating as the 300mm wafer build-out pays off: Q1 capex fell 40% year over year to $676 million while free cash flow jumped to $1.40 billion, up 610% year over year. The company also pocketed $555 million in CHIPS Act incentive proceeds in the quarter. Dividend growth is funded, buybacks continue at a $982 million trailing-12-month pace, and $6.0 billion was returned to owners over the past year. The story that lifted the stock from the $160s is still intact and, by the numbers, strengthening.
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Downside Risk: What Happens If the Thesis Is Wrong
The honest risks cannot be overlooked. A multiple in the 40s leaves no margin if the industrial or automotive cycle rolls over again, and both end markets are classically cyclical. Tariff and trade-policy noise remains a live variable for a company with meaningful China exposure. Execution can wobble, as it did when Q4 FY25 produced a 3.05% EPS miss. And an all-time-high entry carries a simple mathematical reality: if the forward earnings ramp slips a quarter, the multiple compresses before it catches up. A pullback to the low $200s on a single soft guide is entirely plausible.
The Verdict
The stock is no longer cheap, though the thesis still has runway. With free cash flow inflecting, capex rolling over, a reliable dividend, and an analog cycle that just confirmed its turn, the setup still favors patient buyers, particularly retirement-focused investors who want income and a long runway. For existing shareholders, the fundamentals support staying engaged. And for investors considering new exposure, waiting for weakness toward the low $200s offers a better risk/reward than chasing an all-time-high print.
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Source: “AOL Money”
