Texas Instruments (TXN) shares experienced their best day in 25 years yesterday as artificial intelligence (AI) demand helped the semiconductor giant report a blockbuster Q1 and issued upbeat guidance for the current quarter.
TXN’s better-than-expected $4.83 billion sales on $1.68 of earnings per share (EPS) drove its RSI into the high 80s, indicating the stock may be due for a healthy pullback.
Texas Instruments stock has been a lucrative investment in 2026, currently up a remarkable 57% versus the start of this year.
Where Options Data Suggests TXN Shares Are Headed
Despite TXN shares’ blockbuster year-to-date performance, options traders remain convinced that it will rip higher from here as the year unfolds.
According to Barchart, the put-to-call ratio on contracts expiring mid-July sits at 0.58x, indicating bullish skew, with the upper price on those contracts signaling further upside to $316 over the next three months.
Historically, since 2010, Texas Instruments has rallied more than 2.6% on average in May, a seasonal pattern that makes it even more attractive to own in the near term.
A healthy 2.01% dividend yield makes up for another strong reason to hold it for the long term.
Texas Instruments Stock Continues to Benefit From AI Boom
Texas Instruments’ shifting revenue mix and internal manufacturing advantages strengthen the bull case further.
A staggering 90% year-over-year increase in Q1 data center revenue reinforces TXN’s stature as a key beneficiary of the ongoing AI boom.
Unlike rivals that rely heavily on outsourcing, its transition to 300mm wafer production is paying off, lowering chip costs significantly to sustain margins near 60%.
Additionally, TXN’s recent acquisition of Silicon Labs positions it to dominate embedded wireless connectivity as well.
Together with a fortress balance sheet with over $3.2 billion in cash and equivalents, these factors help justify Texas Instruments’ premium multiple of nearly 37x forward earnings.
What’s the Consensus Rating on Texas Instruments?
Wall Street firms also remain constructive on Texas Instruments, believing it’s strongly positioned to capture the next semiconductor supercycle.
The consensus rating on TXN stock sits at a “Moderate Buy” currently, with price targets as high as $315, indicating potential upside of more than 12% from here.
On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
More news from Barchart
- Intel Just Hit a New All-Time High. Does INTC Stock Have More Room to Run?
- As Nike Announces Second Round of Layoffs, Is NKE Stock a Buy, Sell, or Hold?
- Tesla Is Making a $2 Billion Bet on Hardware as AI-Focused SpaceX IPO Draws Near. Is TSLA Stock Safe to Buy?
- AMD Stock Is at Record Highs—and Why It’s Still Not Too Late to Buy
