What Does NVIDIA Offer That Texas Instruments Does Not?
Texas Instruments (TXN) and NVIDIA both sell chips for the data centers now being built. Data centers bring in nearly all of NVIDIA’s revenue, while TI sells to industrial and automotive customers as well as data centers. You pay 38.2 times the yearly profit for TI, yet only 28.1 times for NVIDIA. Their latest earnings calls show the two businesses parting ways on supply.
NVIDIA Is Short Of Supply, TI Is Not
NVIDIA’s data center revenue was $89 billion in fiscal Q2 2027, out of $96 billion in total. Management guided fiscal Q3 revenue to $108 billion, plus or minus 2%. That midpoint is about 12% above the Q2 total. Management expects supply to remain a bottleneck at least through the end of fiscal 2028.
TI guided Q3 2026 revenue to $5.65 billion to $6.15 billion, against $5.5 billion in Q2. TI’s data center sales doubled from a year earlier in Q2. Management said most of the Q3 growth will come from selling more units, not from higher prices. TI also has clean room space it can equip if demand keeps rising.
The two outlooks are different kinds of news. Demand for NVIDIA’s chips is larger than NVIDIA’s supply, so supply sets the pace. TI has spare room to make more, so demand sets TI’s pace.
Each company pays for its position. Memory prices rose more than NVIDIA expected, and NVIDIA reset its margin expectations. Gross margin is the share of sales left after production costs. NVIDIA guided it to 74% for fiscal Q3, down from 75% in Q2. NVIDIA expects gross margin to bottom at 71% to 72% in fiscal Q4.
NVIDIA has also invested nearly $50 billion in AI labs. Management expects AI labs backed by NVIDIA’s balance sheet to make up roughly a quarter of NVIDIA’s business in fiscal 2028. That part of NVIDIA’s business would rest on customers NVIDIA helps fund.
TI’s cost is its factories. TI spent $3.3 billion on capital projects in the year to Q2 2026. TI’s $8.7 billion of cash from operations covered that more than twice over. TI’s free cash flow over the same period included $1.6 billion of CHIPS Act incentives. The yearly numbers on growth, margin, and debt show how far apart the two already are.
NVIDIA Leads On Growth, Margin And Debt
This comparison scores six standard measures of price, growth, profit and debt, and NVIDIA leads Texas Instruments on all six. NVIDIA’s revenue grew 83% over the past year, against 16.7% for TI. NVIDIA kept 65.2 cents of each sales dollar as operating profit, against 38.1 cents at TI.
Debt equals 0.7% of NVIDIA’s market value, against 6.1% for TI. NVIDIA carries almost no debt against its value.
TI wins on one measure outside those six: price to sales. You pay 11.9 times the yearly revenue for TI, against 17.9 times for NVIDIA. The six scored measures judge price on profit, and on profit NVIDIA is cheaper.
TI also has a long dividend record. In September, TI raised the quarterly dividend to $1.52 a share, from $1.42. That was TI’s 23rd straight year of dividend increases.
What Would Count As A Stumble For NVIDIA?
NVIDIA’s lead is wide enough that it would take a real stumble to shrink it. Revenue below NVIDIA’s own guided range for fiscal Q3 would be the first sign of one. NVIDIA holds its call on that quarter on November 17. A result inside or above the range would leave NVIDIA’s lead in place.
NVIDIA leads on growth, margins, debt, and price on profit. TI’s strengths are a lower price on sales, spare capacity, and a long dividend record. Revenue below NVIDIA’s guided range in November is the first result that would test that lead.
How To Act On TXN?
