Should You Buy Texas Instruments Stock Now Or Wait

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Texas Instruments (TXN) stock has returned 91.4% over the past twelve months, against 13.3% for the S&P 500, and trades near its highest close of that year. The shares now cost 40.0 times the company's earnings for that period, against 22.8 for the S&P 500. This price appears to assume the recovery management described on the company's October 21 call keeps going. So is the price now ahead of the business?

Texas Instruments Stock Sits High In Its Own Range

On its twelve-month figures, it is. Texas Instruments traded at 36.0 times its twelve-month earnings at the end of September. That multiple was higher than at 36 of the 40 quarter ends since late 2016. The shares have returned 11.2% since the end of September, lifting the multiple to today's 40.0 times on the same earnings. The cheapest of those quarter ends came in September 2022, at 15.8 times.

The margin under that multiple is far from its best. Over the twelve months to September 2026, Texas Instruments reported an operating margin of 41.1%, higher than at only 15 of those 40 quarter ends. The metric peaked at 53% in the twelve months to September 2022, the same quarter the stock was at its cheapest.

Margins are climbing quickly, though. The quarterly operating margin rose from 34% in fiscal Q4 2025 to 47.6% in fiscal Q3 2026. On the call, management said higher revenue was the largest reason for the third-quarter rise in gross margin. Revenue in fiscal Q3 2026 reached $6.06 billion, up 27.7% from a year earlier, and management said data center sales grew about 95%. Management noted that industrial sales surpassed their prior fiscal Q3 2022 peak during fiscal Q3 2026, marking a key milestone in the broader cyclical recovery. A buyer at today's multiple appears to be paying for margins that keep climbing back toward their 2022 level, not for the margins already reported.

A rich multiple pays for results a business has yet to report. As a case in point, Tesla is worth about $1.3 trillion, about 12 times sales, on hopes for its software and robotaxis. Read Trefis Big Story: How Tesla Blundered.

What Texas Instruments Expects For Fiscal Q4 2026

In its October 21 release, Texas Instruments guided fiscal Q4 2026 revenue of $5.8 billion to $6.3 billion. The $6.05 billion midpoint of that guide is about level with the $6.06 billion the company reported for fiscal Q3. Against the $4.42 billion of revenue in the same quarter of 2025, the midpoint sits about 37% higher.

Analysts expect revenue of $6.11 billion for that quarter. This estimate falls inside the company's guide and sits a little above its midpoint. So analysts expect only that Texas Instruments delivers its own guide and holds sales near their fiscal Q3 level. Management said on the call that it is not seeing any slowdown in data center demand, which is still growing.

How Texas Instruments Stock Has Moved After Its Reports

After its last six reports, Texas Instruments stock rose three times and fell three times over the next two trading days. The moves ran from a 13.6% fall after the July 2025 report to a 17.3% rise after the April 2026 report. After the October 21 report, the shares were almost unchanged by the second close, at $284.69 against $284.65.

A broad sell-off has also hit the stock harder than the market. During the 2025 tariff shock, Texas Instruments lost 26.0% from its peak, against 19.0% for the SPDR S&P 500 ETF.

Texas Instruments is expected to report its fiscal Q4 2026 results in January 2027, and revenue is the number to watch. Revenue above what analysts expect would show sales still rising from fiscal Q3, a sign that a buyer today has not come too late. Revenue near the bottom of the company's guide would show sales falling back from fiscal Q3, and would suggest today is too early to pay a multiple near the top of its range.

Does This Mean You Should Act On TXN?

Our purpose is to inform you with unique data so you make the right investment decisions. That said, betting on a single stock is always risky, no matter which direction you choose.

There is a smarter approach. Since its inception, the Trefis High Quality (HQ) Portfolio has returned 105%, beating the benchmark that combines the three major indices - the S&P 500, S&P Mid-cap, and Russell 2000. And it did so without taking the concentrated risk that comes with do-it-yourself stock picking. If that is how you want to invest, the HQ Portfolio is the place to start.

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