Texas Instruments (TXN) just posted its strongest quarterly earnings in recent memory -- and the driver was not GPUs.
Q1 2026 revenue came in at $4.83 billion (+18.6% YoY), beating the consensus estimate of $4.52B by 6.8%. Diluted EPS of $1.68 surpassed the $1.36 forecast by 23.5%, with net income rising 31% year-over-year.
The headline number: data center revenue surged 90% YoY. This was not NVIDIA or memory. This was analog chips -- the power management and signal processing components that every AI server rack depends on to function.
Here is why it matters structurally. Each GB200-based AI server rack consumes roughly 10x more power than traditional servers. That power must be precisely converted and managed across hundreds of GPUs, CPUs, and memory modules. Analog chips do that work. As hyperscalers (Amazon, Microsoft, Google) guide 30-50% CapEx growth for 2026, TXN's analog exposure to data center is a structural, not cyclical, tailwind.
The analog segment -- 81.2% of TXN's revenue -- grew 22% YoY to $3.92B. Embedded processing added $723M (+12%). Free cash flow on a trailing 12-month basis hit $4.35B, up 154% -- thanks to CHIPS Act incentives on US fab construction.
Q2 2026 guidance: $5.0B-$5.4B revenue (midpoint $5.2B vs $4.85B consensus), EPS $1.77-$2.05. BofA upgraded TXN to Buy with a $320 target (from $235).
In comparison: ADI (Analog Devices) carries a $183.21B market cap with Q1 revenue of $3.16B; MCHP (Microchip Technology) is at $43.79B market cap. TXN ($256.83B) is the clear market leader in analog semiconductors.
Our base case is neutral-to-bullish on TXN over the medium term. For the full analysis in Korean, visit Snakestock.
Top comments (0)