Analog chip manufacturer Texas Instruments (NASDAQ: TXN) reported Q3 2026 results topping the market’s revenue expectations, with sales up 27.7% year on year to $6.06 billion. On top of that, next quarter’s revenue guidance ($6.05 billion at the midpoint) was surprisingly good and 5.6% above what analysts were expecting. Its GAAP profit of $2.62 per share was 8% above analysts’ consensus estimates.

Is now the time to buy Texas Instruments? Find out by accessing our full research report, it’s free.

Company overview

Headquartered in Dallas, Texas since the 1950s, Texas Instruments (NASDAQ: TXN) is the world’s largest producer of analog semiconductors.

Revenue growth

A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last five years, Texas Instruments grew its sales at a mediocre 3.4% compounded annual growth rate. This fell short of our benchmark for the semiconductor sector and is a rough starting point for our analysis. Semiconductors are a cyclical industry, and long-term investors should be prepared for periods of high growth followed by periods of revenue contractions.

We at StockStory place the most emphasis on long-term growth, but within semiconductors, a half-decade historical view may miss new demand cycles or industry trends like AI. Texas Instruments’s annualized revenue growth of 15% over the last two years is above its five-year trend, suggesting some bright spots.

This quarter, Texas Instruments reported robust year-on-year revenue growth of 27.7%, and its $6.06 billion of revenue topped Wall Street estimates by 2.6%. Beyond the beat, this marks 7 straight quarters of growth, showing that the current upcycle has had a good run - a typical upcycle usually lasts 8-10 quarters. Company management is currently guiding for a 36.8% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 17.8% over the next 12 months. While this projection implies its newer products and services will spur better top-line performance, it is still below the sector average.

ONE MORE THING: The $21 AI Application Stock Wall Street Forgot. While Wall Street obsesses over who’s building AI, one company is already using it to print money. And nobody’s paying attention.

AI chip stocks trade at ridiculous valuations. This company processes a trillion consumer signals monthly using AI and trades at a third of the price. The gap won’t last. The institutions will figure it out. You need to see this first. Read the FREE Report Before They Notice.

Product demand & outstanding inventory

Days Inventory Outstanding (DIO) is an important metric for chipmakers, as it reflects a business’s capital intensity and the cyclical nature of semiconductor supply and demand. In a tight supply environment, inventories tend to be stable, allowing chipmakers to exert pricing power. Steadily increasing DIO can be a warning sign that demand is weak, and if inventories continue to rise, the company may have to downsize production.

This quarter, Texas Instruments’s DIO came in at 196, which is 2 days below its five-year average. At the moment, these numbers show no indication of an excessive inventory buildup.

Key takeaways from Texas Instruments’s Q3 results

It was good to see Texas Instruments beat analysts’ EPS expectations this quarter. We were also excited its operating income outperformed Wall Street’s estimates by a wide margin. Zooming out, we think this was a solid print. The stock remained flat at $285.54 immediately following the results.

Is Texas Instruments an attractive investment opportunity right now? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).