Texas Instruments: 3 Key Takeaways for Long-Term Investors
Gross margins hit 64% as industrial and data center demand converged, but capital spending is climbing to nearly $3 billion.
Texas Instruments reported strong third quarter 2026 earnings on October 21, 2026, with revenue reaching $6.1 billion. Chief Financial Officer Julie C. Knecht highlighted that data center products saw nearly double the revenue compared to the previous year, while industrial demand reached a new peak after four years of recovery. This operational leverage, combined with a favorable product mix, led to a 2.8 percentage point increase in gross margin to 64%.
Chief Executive Officer Haviv Ilan emphasized the company's focus on controlling its destiny through substantial capital investments. The business has been investing in clean room floor space and wafer fabrication facilities for years, and management plans to allocate $3 billion in capital expenditures for 2026 to meet accelerating customer orders. Ilan noted that by owning its clean rooms and subfab facilities, Texas Instruments can maintain a competitive advantage and ensure a steady supply of chips.
The company's strong free cash flow of $8.4 billion for the trailing 12 months underscores management's commitment to long-term shareholder value. Knecht stated that the company will continue investing in its manufacturing capabilities, technology, diverse product portfolio, and global reach to generate free cash flow per share growth over the long term.
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