KEY STATS
- Current price: ~$236
- Q1 2026 revenue: $4.8B, up 19% YoY, up 9% QoQ
- Q1 2026 GAAP EPS: $1.68 (includes $0.05 benefit from discrete tax items)
- Q1 2026 gross margin: 58%
- Q1 2026 operating margin: 37%
- Q2 2026 revenue guidance: $5.0B to $5.4B ($5.2B midpoint, ~8% sequential growth)
- Q2 2026 EPS guidance: $1.77 to $2.05
- TIKR model price target: $431
- Implied upside: ~83%
TXN beat its own guidance range. Check whether the second-half setup holds up in TIKR’s valuation model, for free →
Q1 2026 Earnings Breakdown
Texas Instruments stock (TXN) reported Q1 2026 revenue of $4.8B, up 19% year-over-year and above the top of the company’s guided range, with GAAP EPS of $1.68 per share.
Industrial was the headline driver, growing more than 30% year-over-year and more than 20% sequentially, with CEO Haviv Ilan noting on the Q1 2026 earnings call that growth was broad across all sectors, all regions, and all customer sizes, including the first meaningful recovery in the broad market tail.
Data center grew approximately 90% year-over-year and more than 25% sequentially, with Ilan citing TI’s combination of a wide general-purpose analog portfolio and application-specific power delivery products as the structural basis for that growth.
Analog revenue grew 22% year-over-year, Embedded Processing grew 12%, and the Other segment declined 16% from the year-ago quarter.
Automotive was roughly flat sequentially for the full quarter, though Ilan noted on the call that China automotive was down while the rest of the world was up, and characterized the segment as holding near peak levels rather than rolling over.
Pricing was flat sequentially and year-over-year in Q1, better than the typical low-single-digit seasonal decline, and Ilan flagged on the call that analog market pricing has been moving higher in recent months, opening the possibility of price increases in the second half of 2026 depending on demand sustainability.
Texas Instruments stock’s Q2 guidance calls for revenue of $5.0B to $5.4B, with EPS of $1.77 to $2.05, representing sequential growth of roughly 8% at the midpoint, which Ilan described as slightly above seasonal.
Free cash flow on a trailing 12-month basis was $4.4B, up from $1.7B a year prior, and the company returned $6B to shareholders over the same period through dividends and buybacks.
Texas Instruments Stock: What the Income Statement Shows
The Q1 2026 report extends an operating leverage recovery that has been building since the trough of the downcycle, with both gross and operating margins moving decisively higher as revenue rebounds from their 2024 lows.’
Gross margin came in at 58% in Q1 2026, up 210 basis points sequentially, according to CFO Rafael Lizardi on the Q1 2026 earnings call, compared to 55.9% in December 2025 and a cycle low of 56.8% in March 2025 visible on the income statement.
The income statement shows gross margin compressed from a high of 59.6% in September 2024 during the downturn before recovering, establishing that the current 58% level still sits below the recent ceiling and leaves room for further expansion.
Operating income for Q1 2026 was $1.8B, or 37% of revenue, up 37% year-over-year, according to Lizardi on the Q1 earnings call, compared to operating margins of 32.5% in March 2025 and 34.0% in December 2025 shown on the income statement.
Texas Instruments stock’s guidance implies gross margin in the low-to-mid 59% range for Q2 2026 based on the revenue midpoint and Lizardi’s comment that fall-through on incremental revenue should remain in the 75% to 85% range, consistent with prior guidance.
Texas Instruments Stock: Valuation Model Take
The TIKR model places Texas Instruments stock at a price target of $431.46, implying roughly 83% upside from the April 22 close of approximately $236.
The mid-case assumptions underlying that target call for a revenue CAGR of approximately 10.9% and a net income margin of 34.9%, parameters that this quarter’s 19% revenue growth and 37% operating margin move solidly within reach.
Q1’s results strengthen the model’s foundation: the industrial recovery is broadening rather than narrowing, data center is growing at nearly 90% year-over-year, and free cash flow is tracking well above the $8 per share threshold Ilan has flagged as highly probable for 2026.
Texas Instruments stock’s investment case is materially stronger after this report, with the volume recovery, pricing optionality in the second half, and a manufacturing buildout now positioned as a competitive moat rather than a cost drag.
The question this report leaves open: the industrial cycle turned sharply higher in Q1, but TI’s own management acknowledged that 2025 started strong before stalling — does the second half of 2026 follow the same pattern, or does this recovery have a different structural base?
What Has to Go Right
- Industrial demand sustains its broadening trajectory through Q2 and into the second half, with Ilan’s observation that industrial remains 15% below its 2022 peak providing runway for continued growth without needing to assume new demand creation
- Data center revenue continues compounding at elevated rates as TI’s application-specific power delivery sockets move from design-in to production ramp in the second half of 2026 and into 2027, per Ilan’s comments on the Q1 call
- Pricing recovers in the second half of 2026 as demand tightness allows TI to renegotiate contracts set under weaker 2025 conditions, adding gross margin expansion on top of volume leverage
- Texas Instruments stock’s free cash flow per share reaches $8 or above in 2026 as guided, supported by $555M in CHIPS Act funding already received in Q1 and CapEx beginning to moderate from its buildout peak
What Could Still Go Wrong
- Industrial growth decelerates in the second half as it did in 2025, when a strong Q1 and Q2 were followed by a slowdown, leaving Texas Instruments stock exposed to a guide-down if the current 30%-plus YoY growth rate proves front-loaded
- Automotive, currently flat to slightly down sequentially, remains the one major segment without a clear re-acceleration signal, and a China-driven softening could drag the overall mix lower into Q3 and Q4
- Depreciation continues climbing in 2027 at a rate Lizardi described on the call as having “continued upward pressure,” compressing gross margin expansion even as revenue grows, limiting the operating leverage story investors are pricing in
- The Silicon Labs acquisition, expected to close in the first half of 2027, introduces near-term earnings dilution from acquisition charges Lizardi confirmed will run every quarter through close, adding a recurring headwind that complicates the clean EPS trajectory Texas Instruments stock currently shows
Should You Invest in Texas Instruments Incorporated?
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