What Could Send Texas Instruments Stock Soaring?
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Texas Instruments (TXN) stock returned 73.3% over the past twelve months, against 9.8% for the S&P 500. One fast-growing group of TI’s customers is now buying far more than it did a year ago. Any further climb in the stock depends partly on whether those customers keep buying and whether TI’s factories make enough to supply them. So which customers are those, and how much more are they buying?
Texas Instruments’ Data Center Sales Nearly Doubled
Those buyers are TI’s data center customers. On the October 21, 2026 call, management said TI’s sales into the data center market rose about 95% in fiscal Q3 2026 from a year earlier, and about 20% from the quarter before. By management’s estimate, that market is now about 13% of TI’s revenue.
Management said that demand is still rising and that it sees no slowdown in what customers are investing in data centers. TI now sells about 10,000 different parts into this market, a number management said grows every quarter. So far, data center buyers are still buying more.
How Big Could Texas Instruments’ Data Center Sales Get?
Data center sales are still a small slice of Texas Instruments, which sold $20.8 billion over the twelve months to September 30, 2026. Management gives no forecast for these sales, and said it does not give guidance by market. Analog chips made up 79.2% of TI’s sales in fiscal 2025. Data center is a market those chips sell into, not a reported segment.
TI can sell more only if it makes more, and management says the slowest part of adding output is done. The company has built its clean rooms, the buildings that take years to finish, and is quickly ramping a new site in Malaysia. On the factory space it needs, TI looks ready so far.
The share price appears to assume much of that growth already. TI trades at 35.6 times its earnings over the past twelve months, against 21.8 for the S&P 500. Even so, the shares sit 15.7% below their highest close of the past year, reached on June 22, 2026.
What Could Stall Texas Instruments’ Data Center Growth?
A fading rebound in the chip cycle could stall that growth, though management does not see it that way. It said secular growth in chip content is continuing alongside a strong cyclical recovery, and it called data center a market of strong secular growth. When asked on the October 21 call whether today’s tight supply looks like the shortages of the COVID years, management said it would not compare the two yet. The cycle is at an earlier point, management said, and TI will have to wait and see.
Supply is the other risk. Management said lead times on tools are extending, especially at the back end, and that TI is not getting as much as it wanted from its outside assembly partners. If data center demand fades or the tools arrive late, you would own a stock priced well above the market on earnings, just as its fastest-growing sales had slowed.
For fiscal Q4 2026, management guided revenue to $5.8 billion to $6.3 billion, against $6.06 billion in fiscal Q3 2026. Data center demand is still growing, by management’s account, and TI has its clean rooms ready, while tools are taking longer to arrive. TI’s capital spending for 2026, which management expects to be between $2 billion and $3 billion, will be known when the company reports in January 2027.
Does This Mean You Should Act On TXN?
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