Texas Instruments (TXN) Stock Forecast & Price Target

Texas Instruments has demonstrated robust growth, particularly in its Data Center-related revenue, which surged approximately 50% year-to-date, contributing positively to the overall revenue picture. The company's free cash flow (FCF) for the trailing 12 months stood at $2.4 billion, reflecting a significant year-over-year increase of 65%, underlining its strong cash-generating capabilities despite economic challenges. With a consistent commitment to returning value to shareholders, Texas Instruments has distributed $6.6 billion over the past year and marked its 22nd consecutive annual increase in dividends, underscoring a stable and positive financial outlook.

Texas Instruments reported a decline in revenue guidance for 4Q25 to $4.4 billion, which represents a 7% sequential drop, indicating challenges in maintaining sales momentum during uncertain market conditions. Additionally, the company's gross margin decreased to 57.0%, reflecting lower utilization rates and a year-over-year decrease of 260 basis points, which raises concerns about profitability. Furthermore, with macroeconomic factors potentially impacting demand, the negative outlook is compounded by ongoing inventory management issues and reduced fab utilization to manage stock levels effectively.