Texas Instruments Incorporated (TXN): A Bull Case Theory

We came across a bullish thesis on Texas Instruments Incorporated on Stock Analysis Compilation’s Substack. In this article, we will summarize the bulls’ thesis on TXN. Texas Instruments Incorporated’s share was trading at $194.33 as of August 18^th. TXN’s trailing and forward P/E were 35.53 and 34.72 respectively according to Yahoo Finance.

Texas Instruments Inc. (TXN) is a global semiconductor leader with a focused model built around analog and embedded processing chips, deeply embedded in the industrial and automotive sectors that account for most of its revenue. These end markets are prioritized for their long product lifecycles and secular growth opportunities, giving TXN durable demand visibility and positioning it as a foundational supplier to the global economy.

The Analog segment, the largest revenue contributor, provides chips that manage power and translate real-world signals like sound, temperature, and pressure, while the Embedded Processing segment delivers microcontrollers and processors that serve as the digital “brains” in electronic devices. With tens of thousands of products and more than 100,000 customers, TXN benefits from a highly resilient and diversified revenue stream that reduces dependence on individual clients or markets.

A central pillar of its strategy is its commitment to internal manufacturing, with significant long-term investments in expanding 300-millimeter wafer fabrication capacity in the U.S. This vertical integration provides TXN with a structural cost advantage, as 300mm wafers are substantially cheaper to produce, while also enhancing supply chain control, product quality, and resilience against disruptions.

The company complements this operational strength with disciplined capital allocation, prioritizing investments in R&D and manufacturing to reinforce competitive advantages, and then returning all excess cash to shareholders through steady dividend growth and share repurchases. This consistent framework, aimed at maximizing free cash flow per share, has long aligned TXN with its investors and underpins its reputation as a shareholder-focused compounder in the semiconductor industry.

Previously we covered a bullish thesis on Texas Instruments Incorporated (TXN) by The Wolf of Harcourt Street in January 2025, which highlighted cyclical pressures, near-term earnings weakness, and ongoing 300-millimeter investments as long-term advantages. The company’s stock has appreciated about 4.9% since. This is because the long-term story remains intact. Stock Analysis Compilation shares a similar thesis but emphasizes cost advantages and capital allocation.

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Disclosure: None.