Texas Instruments stock snapshot and recent performance

Texas Instruments (TXN) has been drawing investor attention after a strong run in recent months, with the stock last closing at $315.95 and showing solid gains over the past year.

Over the past week, Texas Instruments is up 5.88%, with the move extending a month gain of 19.23% and a past 3 months gain of 48.96%. The stock’s 1 year total return stands at 75.58%, while the 3 year and 5 year total returns are 96.19% and 95.80% respectively.

At a market cap of about $288.9b, Texas Instruments sits among the larger semiconductor companies, supported by annual revenue of $18.44b and net income of $5.34b. On a value score basis, it is currently rated 1, indicating how it screens within this particular framework.

The recent move to a share price of $315.95 continues a strong run, with a 30 day share price return of 19.23% and a 1 year total shareholder return of 75.58%, indicating clear positive momentum.

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With Texas Instruments trading around $315.95 after a powerful run, the key question now is whether the current valuation still leaves room for upside or if the stock already reflects much of its future growth potential.

Most Popular Narrative: 27.5% Undervalued

Against the last close of $315.95, the most followed narrative on Texas Instruments pegs fair value at $435.69, implying a sizeable gap that has caught investor attention.

Texas Instruments is in the midst of a multiyear capacity-expansion cycle that is temporarily suppressing free cash flow but materially enhancing the company’s long-term competitive position. The buildout of U.S.-based 300mm analog manufacturing is expected to structurally improve cost efficiency, support higher gross margins, and increase supply-chain resilience. As these assets ramp and utilization normalizes, TXN should regain its historical free-cash-flow profile, supported by diversified end-market exposure across industrial, automotive, aerospace/defense, and energy infrastructure.

Curious what sits behind that higher fair value? This narrative focuses on richer margins, a different growth glide path, and a premium profit multiple. The exact targets might surprise you.

Result: Fair Value of $435.69 (UNDERVALUED)

However, this bullish setup can be challenged if the multiyear fab build takes longer to ramp profitably than expected, or if AI related demand proves weaker than assumed.

Another View: What Multiples Are Signalling

While the most popular narrative points to a fair value of $435.69, the current P/E of 53.9x paints a more demanding picture. It is lower than the US Semiconductor industry average of 68.7x, yet higher than peers at 47.4x and above a fair ratio of 39.4x, which suggests limited margin for error if earnings progress disappoints.

For investors weighing this tension between price and earnings power, it helps to see how the numbers stack up in detail, not just in headlines: See what the numbers say about this price — find out in our valuation breakdown.

Next Steps

With sentiment split between upside potential and valuation questions, this is a moment to move quickly and test the data for yourself using 2 key rewards and 3 important warning signs.

Looking for more investment ideas?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.