Texas Instruments Upgraded to Buy Amid Strong Q2 Results and Growing Data Center Demand
Arete Research has upgraded Texas Instruments (NASDAQ:TXN) from Neutral to Buy, raising its price target by 34% to $405. The upgrade follows a strong second-quarter performance where the company reported revenue of $5.46 billion—23% higher year-over-year—and EPS of $2.14, surpassing estimates. A key highlight was the doubling of data center income amid rising demand for analog components in AI infrastructure. Analysts note that Texas Instruments is well-positioned to benefit from a multiyear shortage of analog semiconductors driven by surging AI adoption and hyperscalers' shift toward high-voltage architectures. The company's expertise in power conversion, motor control, and sensing technology supports this transition. Additionally, its recent collaboration with Nvidia on robotics expands its role in the sector. The stock has risen 60% year-to-date but now trades at a forward P/E of around 35x—higher than historical averages for an analog business still tied to cyclical markets like automotive and industrial.
Topics: AI data centers analog semiconductors Arete Research upgrade Texas Instruments