TXN

Workday, Inc. WDAY reported second-quarter fiscal 2027 non-GAAP earnings of $2.75 per share, which increased 24.4% from $2.21 a year ago. The bottom line beat the Zacks Consensus Estimate of $2.62 by 4.96%. Revenues rose 12.8% to $2.65 billion, beating the consensus estimate of $2.63 billion by 0.57%.Subscription growth, stronger margins and rising AI adoption supported the quarter. AI products drove more than $100 million of new annual contract value, representing more than 25% of total new Annual Contract Value (ACV). 12-month subscription revenue backlog increased 14.2% to $9.03 billion. Subscription services revenues rose 13.9% year over year to $2.47 billion, accounting for about 93% of total revenues. Roughly 60% of the increase came from expansion among existing customers, with the balance from customers added after the start of the comparable prior-year period. Professional services revenues slipped 1% to $178 million as Workday continued to leverage service partners. U.S. revenues increased 12% to $1.97 billion, while international revenues climbed 17% to $682 million. Total subscription revenue backlog grew 8% to $27.4 billion, and gross revenue retention remained about 97%. Workday, Inc. price-consensus-eps-surprise-chart | Workday, Inc. Quote Agentic AI annual recurring revenues approached $600 million, rising more than 200% year over year and 20% sequentially. More than 5,500 customers were using at least one organic Workday agent, up more than 35% from the prior quarter. More than half of net new wins included one or more AI solutions. AI activity was visible across products. More than 30 million candidates interacted with the Talent Acquisition Agent, which scheduled more than eight million interviews. 170 customers had purchased Adaptive Decision Intelligence, and more than 200 customers had signed up for Flex Credits. Total costs and expenses increased 11% to $2.34 billion. The rise included $126 million of higher employee-related expenses, $43 million of additional facilities and IT costs, and a $32 million increase in third-party hosted infrastructure spending. During the quarter, non-GAAP net income increased 13.2% to $677 million. GAAP operating income advanced 26% to $313 million, with margin improving to 11.8% from 10.6%. Non-GAAP operating income rose 21% to $824 million, while margin expanded to 31.1% from 29%. Workday attributed the improvement to revenue growth outpacing headcount growth and moderated operating expenses. GAAP results also included a $374 million nonrecurring tax benefit. Operating cash flow totaled $520 million, down from $616 million a year earlier, while free cash flow declined to $460 million from $588 million. During the first six months of 2026, the company generated $1.22 billion in cash compared with $1.07 billion in the year-ago period. Management attributed the year-over-year decline to the payroll calendar, which included an additional payroll run in the quarter. As of July 31, 2026, Workday had cash, cash equivalents and marketable securities of $3.4 billion with long-term debt of $1.99 billion. The company repurchased $1.3 billion of shares during the quarter, completing its $5 billion repurchase plan six months ahead of target. The board subsequently authorized a new open-ended $4 billion share repurchase program. For the third quarter of fiscal 2027, Workday expects total revenues of $2.69 billion, up 11%, and subscription revenues of $2.52 billion, up 12%. Management projects 12-month subscription revenue backlog growth of 11-12% and a non-GAAP operating margin of 30%. For fiscal 2027, total revenues are projected at $10.65-$10.66 billion, up 12%, while subscription revenues are forecast at $9.94-$9.95 billion, up 13%. Workday raised its non-GAAP operating margin outlook to 31%. It maintained operating cash flow guidance of $3.45 billion and expects $3.18 billion of free cash flow, up 15%. Management's current fiscal 2028 target calls for subscription revenue growth of about 11%, consistent with the expected second-half fiscal 2027 growth rate. Potential upside could come from Sana Enterprise, Workday Extend with Data Cloud and AI agents, all of which management said are seeing strong early demand. Workday also expects its non-GAAP operating margin to expand by at least two percentage points in fiscal 2028. The company is prioritizing adoption before full monetization of consumption-based AI products, with management expecting AI to become a more significant contributor to incremental annual recurring revenues from fiscal 2028 and beyond. Workday currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Silicon Motion Technology Corporation SIMO sports a Zacks Rank #1 at present. In the last reported quarter, it delivered an earnings surprise of 14.08%. It is benefiting from growing demand for NAND flash storage solutions driven by AI, data centers, PCs, smartphones and automotive applications. Its focus on advanced controller technologies, PCIe Gen5 solutions and expanding embedded storage offerings is expected to support long-term growth and strengthen its position in the storage semiconductor market.Texas Instruments Incorporated TXN carries a Zacks Rank #2 at present. It delivered an earnings surprise of 12.04% in the last reported quarter. The company is experiencing strong demand for analog and embedded processing solutions across industrial, automotive, communications and personal electronics markets. Its focus on product innovation, manufacturing capacity expansion and embedded processing technologies is likely to drive long-term growth.Amazon.com, Inc. AMZN carries a Zacks Rank #2 at present. It delivered an earnings surprise of 2.73% in the last reported quarter.Amazon continues to gain from strong demand for e-commerce, cloud computing, and digital advertising services, supported by the growing adoption of AI. Its expanding Amazon Web Services business, investments in generative AI and cloud infrastructure, and growing fulfillment network support sustained growth and strengthen its competitive position. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Workday, Inc. (WDAY) : Free Stock Analysis Report Amazon.com, Inc. (AMZN) : Free Stock Analysis Report Texas Instruments Incorporated (TXN) : Free Stock Analysis Report Silicon Motion Technology Corporation (SIMO) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Texas Instruments has delivered a strong share price run over the past few years, yet the valuation signals are not fully aligned. The intrinsic value estimate based on a Discounted Cash Flow (DCF) view points to a price that is close to fair, while market multiples suggest the stock trades at a premium. Texas Instruments has returned 68.5% over the past 3 years, which puts extra focus on whether the current price still leaves room for an appealing long term outcome. The company’s long lived analog and embedded product portfolio can support steady cash generation, although any pressure on pricing or end market demand remains a key risk to how those cash flows evolve. The broader valuation checks produce a mixed picture rather than a clear bargain or clear overvaluation, with the value score of 3 reflecting that split. The issue now is whether Texas Instruments’ current share price already reflects most of its cash flow potential or if there is still a reasonable margin for investors over the coming years. Spot opportunities with a similar cash flow and valuation profile to Texas Instruments by scanning our curated list of 51 high quality undervalued stocks. The Discounted Cash Flow (DCF) model estimates what Texas Instruments is worth based on projected free cash the business could return to shareholders. The latest twelve month free cash flow sits at about $3.7b, and the model assumes these cash flows continue to grow from here rather than contract, which is consistent with a mature but still expanding analog and embedded business. On these assumptions, the DCF model points to an intrinsic value around $239 per share in $ and indicates the stock trades at roughly a 9.4% premium to that estimate. The current price therefore already incorporates a fair amount of future cash generation, with only a modest buffer against any weaker than expected demand or pricing pressure. Overall, the Discounted Cash Flow view suggests Texas Instruments appears roughly fairly valued, with only a small tilt toward being overvalued at today’s price. Texas Instruments is fairly valued according to our Discounted Cash Flow (DCF), but this can change at a moment's notice. Track the value in your watchlist or portfolio and be alerted on when to act. Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Texas Instruments. The P/E ratio is a useful cross-check for Texas Instruments because earnings power is central to how investors tend to value established semiconductor companies. Texas Instruments trades on a P/E of about 39.7x, which is below the broader semiconductor industry average of around 46.8x and also a little below the peer group average of roughly 41.6x. The tailored fair P/E ratio for Texas Instruments is estimated at about 34.9x, reflecting its specific mix of growth expectations, profitability profile, size, and risks. Compared with that fair ratio, the current P/E remains higher. This implies investors are paying a premium to what this framework suggests would be a more neutral earnings multiple, even though the stock does not appear extreme relative to the wider sector. On this P/E yardstick, Texas Instruments stock appears overvalued relative to the earnings multiple that looks more in line with its fundamentals. See what the numbers say about this price — find out in our valuation breakdown. Simply Wall St Narratives for Texas Instruments link the valuation puzzle above to specific assumptions about Texas Instruments' future growth, margins and earnings that would need to hold for the stock to be worth meaningfully more or less than today’s price. These narratives are available on the company’s Community page. Where a single ratio or model gives you one figure, these narratives lay out the future that figure implies so you can watch how reality compares over time. Community views on Texas Instruments are sharply split, with one camp seeing significant upside and the other seeing meaningful downside risk. Bull case: 40% undervalued Read the full Bull Case to see why Texas Instruments could be undervalued Bear case: 16% overvalued Read the full Bear Case to see why Texas Instruments could be overvalued Do you think there's more to the story for Texas Instruments? Head over to our Community to see what others are saying! For Texas Instruments, the Discounted Cash Flow (DCF) estimate points to an intrinsic value that is close to the current share price. This suggests limited built in upside if cash flows track the assumptions used. At the same time, the stock screens as overvalued on its current earnings multiple, so investors are paying up for its earnings profile relative to a tailored fair P/E. That mixed message fits with the broader valuation checks and leaves the debate hinging on one issue. The key question is whether Texas Instruments can sustain cash generation and margins at levels that justify both the intrinsic value and the premium earnings multiple. 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. Companies discussed in this article include TXN. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

It has been about a month since the last earnings report for Texas Instruments (TXN). Shares have lost about 6.8% in that time frame, underperforming the S&P 500. But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Texas Instruments due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers. Texas Instruments reported second-quarter 2026 earnings of $2.14 per share, which increased 52% year over year. The bottom line beat the Zacks Consensus Estimate by 12%. TXN posted revenues of $5.46 billion, which rose 23% from the year-ago quarter. The top line surpassed the consensus mark by 4.6%, driven by strength in industrial, data center and automotive markets. Texas Instruments’ second-quarter results reflected strength across its two core operating segments. Analog revenues came in at $4.37 billion (79.9% of total revenues), which grew 26% from the year-ago quarter, underscoring improving demand conditions across key end markets. The figure came above our model estimate of $4.08 billion. Embedded Processing revenues totaled $788 million (14.4% of total revenues), reflecting 16.1% year-over-year growth. The figure missed our model estimate of $799.1 million. The Other segment generated $310 million of revenues (5.7% of total revenues), which declined 2.2% from the prior-year period. The figure missed our model estimate of $328.5 million. Texas Instruments’ gross profit increased 30% year over year to $3.35 billion. Gross margin of 61.4% expanded 350 basis points (bps) year over year. Selling, general and administrative (SG&A) expenses increased 1% year over year to $490 million. As a percentage of revenues, SG&A expenses contracted 190 bps year over year to 9%. Research and development expenses increased 1.5% year over year to $535 million. As a percentage of revenues, it decreased 210 bps year over year to 9.8%. Operating profit rose 47.8% year over year to $2.31 billion. The operating margin was 42.3%, which expanded 710 bps from the prior-year quarter’s number. As of June 30, 2026, the cash and short-term investment balance was $7 billion, up from $5.1 billion as of March 31, 2026. At the end of the reported quarter, TXN’s long-term debt was $12.903 billion compared with $12.901 billion in the previous quarter. Texas Instruments generated an operating cash flow of approximately $2.7 billion in the second quarter. During the second quarter, it repurchased stocks worth $27 million and paid $1.295 billion in dividends. Management’s outlook calls for third-quarter 2026 revenues in the range of $5.65-$6.15 billion. The company expects an effective tax rate of about 13% in the third quarter. Texas Instruments expects earnings per share between $2.23 and $2.57. In the past month, investors have witnessed a upward trend in estimates review. The consensus estimate has shifted 14.26% due to these changes. At this time, Texas Instruments has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock has a score of D on the value side, putting it in the bottom 40% for this investment strategy. Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Texas Instruments has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Texas Instruments Incorporated (TXN) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Cirrus Logic, Inc. CRUS presents a clear trade-off for investors. Its valuation has compressed toward the low end of its five-year range, while forward earnings expectations have weakened. Strong smartphone execution, a debt-free balance sheet and a broader product pipeline provide support. Customer concentration, delayed PC growth and higher research and development spending keep the near-term setup more demanding. CRUS trades at 13.36 times forward 12-month earnings, below the Zacks semiconductor sub-industry multiple of 14.58 times. Its five-year median is 18.75 times, while the five-year low is 12.42 times. That puts the current multiple close to the bottom of its historical range. The discount is visible, but valuation has to be considered alongside the weaker earnings trajectory rather than as a stand-alone reason to buy. Fiscal first-quarter adjusted earnings reached $1.84 per share, up 21.9% year over year and above the Zacks Consensus Estimate of $1.45. Revenues increased 12.9% to about $460 million as smartphone component demand supported results. The Zacks Consensus Estimate for current-fiscal-year earnings is $7.47 per share, below fiscal 2026 earnings of $9.26. The current-fiscal-year EPS estimate has also moved about 5% lower over the past four weeks, showing that the recent quarterly beat has not prevented a broader reset in expectations. Cirrus' largest customer represented about 90% of first-quarter revenues. That concentration leaves the company exposed to changes in product timing, sourcing decisions and pricing, while anticipated selling-price reductions and slower PC growth add execution risk. Texas Instruments Incorporated TXN generated 2025 revenues across industrial, automotive, personal electronics, data center and communications equipment markets. Analog Devices, Inc. ADI reported fiscal second-quarter 2026 growth across all end markets, with industrial representing 50% of revenues. Their broader end-market mixes provide context for how concentrated Cirrus remains while newer businesses scale. Cirrus ended the quarter with $1.2 billion in cash and investments and no debt. Free cash flow totaled $48.6 million, giving the company financial flexibility as it increases research and development spending to support opportunities across audio and high-performance mixed-signal products. Image Source: Zacks Investment Research The company spent $34.5 million to repurchase about 211,000 shares during the quarter and had $239.6 million remaining under its authorization. After quarter-end, it used another $50.5 million for repurchases. Management continues to prioritize organic investment, followed by acquisitions and buybacks. The low valuation improves the stock's price-to-earnings backdrop, but slower earnings expectations, customer concentration and delayed PC growth keep the investment case unsettled. The current discount is more useful as context than as a stand-alone buy signal. CRUS currently carries a Zacks Rank #5 (Strong Sell). It has a Growth Score of B, Momentum Score of B and VGM Score of B, while its Value Score is C. The B scores show favorable characteristics in several styles, but the Style Scores are designed to complement the Zacks Rank. With a #5 Rank and falling earnings estimates, the near-term signal still favors patience. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Cirrus Logic, Inc. (CRUS) : Free Stock Analysis Report Analog Devices, Inc. (ADI) : Free Stock Analysis Report Texas Instruments Incorporated (TXN) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Microchip MCHP is set to report its first-quarter fiscal 2027 results on Aug. 6.For the to-be-reported quarter, MCHP expects revenues between $1.442 billion and $1.469 billion. The Zacks Consensus Estimate for revenues is pegged at $1.46 billion, suggesting 35.39% growth from the figure reported in the year-ago quarter.Microchip expects non-GAAP earnings in the 67-71 cents per share range. The consensus mark for earnings is pegged at 70 cents per share, up by a penny over the past 30 days. The company reported earnings of 27 cents per share in the year-ago quarter. Image Source: Zacks Investment Research MCHP’s earnings have surpassed the Zacks Consensus Estimate in all the trailing four quarters, with the average being 8.72%. Microchip Technology Incorporated price-eps-surprise | Microchip Technology Incorporated Quote Let us see how things have shaped up for the upcoming announcement. Microchip’s fiscal first-quarter results are expected to have benefited from improving demand across its major end markets, including industrial, automotive, communications, aerospace & defense and data center. The company indicated that customer inventory normalization was largely complete, with bookings strengthening across geographies and end markets. Higher distributor replenishment and increasing direct customer purchases are likely to have supported sequential revenue growth.The to-be-reported quarter’s results are expected to have been supported by robust bookings momentum and channel replenishment. MCHP highlighted that April bookings reached their highest monthly level in nearly four years, while distributor inventories remained near historical lows at roughly 26 days. Strong sell-through trends and distributors rebuilding inventory to support higher demand are expected to have contributed to top-line growth during the quarter.Strong demand for AI and data center infrastructure is expected to have remained a key growth driver. Microchip continues to benefit from increasing adoption of storage controllers, CXL memory controllers, PCIe switches and connectivity products. Growing design activity, expanding customer engagement and momentum across high-speed connectivity solutions likely supported revenues during the quarter.Higher factory utilization, lower inventory-related charges and disciplined cost management are expected to have driven margin expansion in the quarter. Management guided to improved gross margin of roughly 62.8% and operating margin of about 33.8% for the first quarter of fiscal 2027, reflecting operating leverage as revenue growth accelerated and inventory correction progressed. Microchip shares have inched up 18% year to date (YTD), underperforming the Zacks Computer and Technology sector’s appreciation of 11.7%. The company has lagged peers, including Texas Instruments TXN, onsemi ON and Analog Devices ADI, over the same time frame, shares of which have returned 55.4%, 48.5% and 33.4%, respectively. Image Source: Zacks Investment Research Microchip shares are trading at a premium, as suggested by a Value Score of D. In terms of the forward 12-month price-to-earnings (P/E), Microchip is trading at 21.87X, higher than the sector’s 20.74X and onsemi’s 21.16X. However, MCHP shares are trading at a lower multiple compared with Texas Instruments’ 29.17X and Analog Devices’ 25.68X. Image Source: Zacks Investment Research Microchip’s long-term growth is expected to be driven by its expanding AI and data center business. The company expects its dedicated Data Center Solutions business to grow sharply, supported by PCIe Gen6 switches, CXL memory controllers, storage controllers and newly introduced PCIe retimers. Multiple design wins, including hyperscaler engagements, position the company to benefit from increasing AI infrastructure investments and the shift toward inference computing.Microchip continues to focus on five strategic pillars: microcontrollers, analog, networking & connectivity, high-performance compute and edge AI. Its Total System Solutions strategy enables higher content per customer through integrated hardware, software and reference designs, while megatrend exposure spanning AI, industrial automation, networking, automotive modernization and sustainability supports growth above the broader semiconductor industry.Microchip faces intense competition in high-speed connectivity and PCIe switching markets. onsemi’s strong position in automotive and industrial power semiconductors and an expanding AI infrastructure portfolio is a key catalyst. Analog Devices is raising competitive pressure through strong momentum in industrial automation, aerospace & defense, AI infrastructure and automotive. Texas Instruments remains one of Microchip’s strongest competitors through its broad analog and embedded processing portfolio, manufacturing scale and aggressive capacity expansion.Moreover, rising foundry, OSAT, materials and manufacturing costs remain a headwind for Microchip. Sustaining utilization, managing inventory toward long-term targets and successfully executing its recovery plan while achieving its 65% gross margin and 40% operating margin objectives will remain critical to MCHP’s long-term performance. Despite near-term competitive and cost pressures, Microchip appears well positioned heading into fiscal first-quarter 2027. Improving bookings, channel replenishment, higher factory utilization and growing demand across AI, data center, industrial and automotive markets are expected to support solid top-line growth and margin expansion. The company’s expanding high-performance compute and connectivity portfolio, coupled with its Total System Solutions strategy, provides a strong foundation for sustained long-term growth. Microchip currently has a Zacks Rank #2 (Buy) and has a Growth Score of A, a favorable combination that offers a strong investment opportunity, per the Zacks Proprietary methodology. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Microchip Technology Incorporated (MCHP) : Free Stock Analysis Report Analog Devices, Inc. (ADI) : Free Stock Analysis Report Texas Instruments Incorporated (TXN) : Free Stock Analysis Report ON Semiconductor Corporation (ON) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

The chipmaker looks dear on profits and slightly cheap on cash, and what sits under that gap is a business that turns far more of each sales dollar into cash than into profit while it swaps a shrinking handset exposure for faster end markets in data centers and automotive. GlobalFoundries (GFS) stock is down 35% over the past month, and down 23% over the trailing three months against a 3.9% gain for the S&P 500. A fall that size usually leaves a stock cheap. This one is not: at about $50 a share, for a market capitalization near $27.8 billion, it trades at 35.7 times earnings against 23.9 for the S&P 500. On cash flow, the same stock is cheaper than the index. So Why Is It Cheaper Than The Market On Cash Flow? Sales carry a premium too: 4.1 times revenue against 3.4 for the S&P 500. The cash-flow multiple is 14.3 against 15.7 for the index, because the company turns far more of each sales dollar into cash than into profit. Over the trailing twelve months, it converted 28% of revenue into operating cash flow, versus 22% for the market, roughly $1.9 billion on $6.8 billion of sales, while 11.4% of that revenue reached net income. What Have Three Years Actually Done To The Top Line? Shrunk it. Revenue over the trailing twelve months was $6.8 billion, essentially unchanged from a year earlier, and across the last three years it has contracted at a 5.0% average annual rate while the S&P 500 compounded at 5.7%. Profitability sits under the market too: a 12.1% operating margin against 18.4% for the index and an 11.4% net margin against 13.0%. In the first quarter of 2026 the top line grew 3.1% year over year to $1.6 billion, but one quarter is a data point, not a trend. Can The Faster End Markets Outrun The Shrinking Handset Business? The mix shift is what a buyer is paying for. In the first quarter of 2026, communications infrastructure and data centers made up about 14% of the total and grew 32% year over year; automotive, about 23%, grew 24%. The part pulling the other way is bigger: smart mobile devices, about 34% of the total, fell 5% and is guided down a high single-digit percentage across 2026. By the company's own account, silicon photonics should roughly double in 2026 and exit 2028 above a $1 billion run rate, and the 2026 growth outlook for comms and data centers is now a high-30s percentage, up from about 30%. The bear objection is durability, not scale: a 14% slice has to keep compounding at 32% while the largest end market, 34% of the total, is guided down all year, and one analyst asked whether a high-30s pace is a share gain when parts of the AI complex compound at 50% to 100%. What Has A Market Break Cost This Stock Before? Plenty. In the 2022 inflation shock, GFS fell 42% against a 24% drop for the S&P 500, and from its low it took about 47 months to climb back to its pre-crisis high. It is already deep in a hole the market has not shared: the stock sits about 44% below its 52-week high of $89.83, even after a 27% trailing twelve-month return, and the options market prices implied volatility at 77, the 89th percentile of its trailing one-year range. Gross Margin, Design Wins And The Price Adjustments To Watch So what would make the price worth paying? Three things. First, the company's own target: exiting 2026 at or above a 30% gross margin, against about 29% on a non-IFRS basis in the first quarter of 2026 and a guide near 29% for the second quarter of 2026, a quarter that has since closed with results still to report. Working against that target is a roughly half-point quarterly cost headwind from supply chain security. Second, whether the faster end markets lift the three-year top-line rate out of negative territory; the leading indicator is the 50% year-over-year jump in first-quarter 2026 design wins. Third, the price adjustments management says start toward the back end of 2026 and carry into 2027. Get those, and the premium has support; miss them, and what you keep paying is 35.7 times earnings against 23.9 for the market. Rather than settle that on instinct, you can score growth, profitability, risk, and value together with a five-factor buy-or-sell scorecard. The Premium Can Compress While You Wait For The Margin Even if the margin story lands, the multiple can reprice long before the business does, and this stock fell 42% in a downturn that cost the market 24%. Compounding does not require winning that timing argument, only that no single holding decides your result. That is the idea behind the Trefis High Quality portfolio, a rules-based basket built so one position cannot set the outcome. That portfolio has a track record of outpacing a benchmark that combines the three major indices - the S&P 500, S&P Mid-cap, and Russell 2000.

On Semiconductor ON or onsemi is set to report its second-quarter 2026 results on Aug. 3.The company expects second-quarter 2026 earnings between 65 cents per share and 77 cents per share. The Zacks Consensus Estimate for second-quarter 2026 earnings has increased by a penny to 72 cents per share over the past 30 days, suggesting 35.85% growth from the figure reported in the year-ago quarter.onsemi expects second-quarter 2026 revenues between $1.535 billion and $1.635 billion. The Zacks Consensus Estimate for second-quarter revenues is pegged at $1.59 billion, indicating an increase of 7.99% from the figure reported in the year-ago quarter. Image Source: Zacks Investment Research ON’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, missing once, the average surprise being 2.83%. ON Semiconductor Corporation price-eps-surprise | ON Semiconductor Corporation Quote Let’s see how things have shaped up for the upcoming announcement. ON’s second-quarter 2026 results are expected to have benefited from a stabilizing automotive demand environment. The company indicated that customer inventory corrections in automotive are largely behind onsemi, with demand improving sequentially. Higher shipments into electric vehicles (EVs), advanced driver-assistance systems (ADAS), and powertrain applications are likely to have supported second-quarter growth in revenues. ON also expects silicon carbide (SiC) demand to improve as customer inventories normalize.onsemi noted improving order trends across industrial automation, energy infrastructure and factory automation markets. Continued recovery in industrial demand, combined with replenishment orders from distributors, is expected to have provided a sequential boost to revenues. Moreover, the company continues to benefit from increasing demand for power management solutions supporting AI servers and data centers. ON highlighted growing design wins for high-efficiency power products that address rising AI power requirements, providing an incremental growth driver. Higher factory loading and continued execution of the Fab Right manufacturing strategy are expected to have improved gross margin sequentially in the to-be-reported quarter.Nevertheless, weak EV demand in certain regions and cautious OEM production schedules are expected to have limited revenue growth. Moreover, slow capital spending in the industrial market could have hurt top-line growth. Continued softness in consumer electronics and other non-core markets has been a headwind for ON’s to-be-reported quarter. onsemi shares have appreciated 45.6% year to date (YTD), outperforming the Zacks Computer and Technology sector’s return of 6.9%. ON has outperformed Analog Devices ADI and Microchip MCHP but lagged Texas Instruments TXN YTD. While Texas Instruments shares have returned 56.4%, Analog Devices and Microchip shares have dropped 30.3% and 12%, respectively, over the same time frame. Image Source: Zacks Investment Research onsemi stock is trading at a premium, as suggested by the Value Score of C. In terms of the forward 12-month price/earnings, ON is trading at 20.85X, higher than the broader sector’s 20.01X, and Microchip’s 20.82X. However, onsemi is trading below Texas Instruments’ and Analog Devices’ multiples of 30.53 and 25.13, respectively. Image Source: Zacks Investment Research onsemi continues expanding its SiC portfolio for EV traction inverters, charging infrastructure and renewable energy applications. Rising EV penetration and increasing semiconductor content per vehicle remain significant long-term tailwinds. The continued adoption of ADAS, vehicle electrification, autonomous driving and intelligent power systems is expected to drive sustained demand for onsemi’s power and sensing technologies.Meanwhile, the rapid expansion of AI data centers is increasing demand for high-efficiency power management solutions, an area where onsemi has been strengthening its product portfolio. The planned acquisition of Synaptics would expand onsemi beyond power and sensing into intelligent edge systems, increasing its total addressable market and strengthening its position in physical AI, edge AI compute, connectivity and human-machine interface solutions.Moreover, manufacturing optimization through facility divestitures and footprint rationalization is expected to reduce costs and expand ON’s gross margins over time. The company expects approximately $35 million of annual cost savings from the recently announced manufacturing divestitures once fully implemented.However, stiff competition from the likes of Texas Instruments, Analog Devices, and Microchip Technology, among others, is a significant headwind. Export controls, tariffs, and supply-chain disruptions are noteworthy headwinds. onsemi’s improving automotive and industrial demand, expanding AI data center opportunity and Fab Right initiatives are encouraging. However, persistent weakness in select EV and consumer markets, competitive pressures and the stock’s premium valuation warrant caution. Investors may prefer to wait for greater clarity on the recovery and margin expansion before taking a position in ON shares.onsemi currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report ON Semiconductor Corporation (ON) : Free Stock Analysis Report Analog Devices, Inc. (ADI) : Free Stock Analysis Report Texas Instruments Incorporated (TXN) : Free Stock Analysis Report Microchip Technology Incorporated (MCHP) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Texas Instruments Inc. TXN — a major original equipment manufacturer of analog, mixed-signal and digital signal processing integrated circuits — reported strong second-quarter 2026 earnings results, easily surpassing the Zacks Consensus Estimate with respect to both the top and bottom lines. TXN continues to deliver robust profitability improvement. Gross margin reached 61.4% from 57.9% in the year-ago quarter, while operating margin expanded to 42.3% from 35.1%. Driven by higher revenues and improved margins, second-quarter earnings per share jumped 52% year over year. Texas Instruments is benefiting from solid AI-powered data center demand, which is boosting its prospects in the enterprise systems market. As AI infrastructure scales from data centers to edge devices, vehicles, and industrial systems, TXN’s chips are becoming critical components in the broader buildout. The chart below shows the price performance of TXN year to date. Image Source: Zacks Investment Research TXN has a strong position in the foundational analog and embedded processing semiconductor markets, which are critical for long-term growth in key industries like industrial, automotive, personal electronics and AI data centers. As cloud and AI workloads continue to rise, TXN’s strong portfolio and manufacturing scale position it well to benefit from sustained demand for efficient, high-performance power solutions in data center infrastructure. TXN provides supplies foundational analog, power management and edge-processing semiconductors to corporate bigwigs like NVIDIA Corp. NVDA, Apple Inc. AAPL, Ford Motor Co. F and Medtronic plc MDT, to name a few. TXN’s outlook calls for third-quarter 2026 revenues in the range of $5.65-$6.15 billion. The company expects earnings per share between $2.23 and $2.57. Management expects an effective tax rate of about 13% in the third quarter. Texas Instruments has an expected revenue and earnings growth rate of 20.4% and 49.9%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 6.4% over the last seven days. TXN has an expected revenue and earnings growth rate of 11.6% and 15.2%, respectively, for the next year. The Zacks Consensus Estimate for next year’s earnings has improved 6.6% over the last seven days. Image Source: Zacks Investment Research Texas Instruments sports a Zacks Rank #1 (Strong Buy) at present and has a Zacks Momentum Score of A. You can see the complete list of today’s Zacks #1 Rank stocks here. The short-term average price target of brokerage firms represents an increase of 13.7% from the last closing price of $279.41. The brokerage target price is currently in the range of $215-$400. This indicates a maximum upside of 43.2% and a maximum downside of 23.1%. The risk/reward ratio is a highly favorable 1:87. Image Source: Zacks Investment Research Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Ford Motor Company (F) : Free Stock Analysis Report Texas Instruments Incorporated (TXN) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report Medtronic PLC (MDT) : Free Stock Analysis Report NVIDIA Corporation (NVDA) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Make better investment decisions with Simply Wall St's easy, visual tools that give you a competitive edge. Texas Instruments stock has delivered a 68.4% return over the past three years, and after that kind of run the question is whether the current price still makes sense given what the valuation checks are saying, especially with the Discounted Cash Flow (DCF) estimate pointing to a premium to intrinsic value while market multiples look closer to fair. A 68.4% return over three years highlights how strongly Texas Instruments has rewarded long term holders, which raises the bar for what counts as an attractive entry point today. Recent attention on chipmakers in a choppy market can support valuation if investors stay willing to pay up for Texas Instruments' role in the sector. However, renewed selling pressure in semiconductor stocks may weigh on how much investors are prepared to pay for its future cash flows. With Texas Instruments screening as undervalued in only 2 of 6 broad valuation checks, the overall picture leans expensive rather than a clear bargain. The stock's next move may depend on whether investors conclude that the current premium to the DCF based intrinsic value estimate is justified by Texas Instruments' long term prospects or leaves too little margin for error. Find out why Texas Instruments' 51.9% return over the last year is lagging behind its peers. The Discounted Cash Flow (DCF) model values Texas Instruments by projecting future free cash flows and discounting them back to today. On this view, Texas Instruments is treated as a mature business with growing but not explosive cash generation, starting from the latest twelve month free cash flow of about $3.7b. Those cash flows, projected to keep growing over time, translate into an estimated intrinsic value of about $245 per share. That sits below the current share price and implies the stock screens as roughly 14% overvalued on this model. Recent selling in chipmakers, including Texas Instruments, helps explain why investors are questioning how much of that future cash generation is already factored into the price. On this DCF view, Texas Instruments stock currently looks overvalued relative to its projected cash flows. Our Discounted Cash Flow (DCF) analysis suggests Texas Instruments may be overvalued by 14.0%. Discover 50 high quality undervalued stocks or create your own screener to find better value opportunities. Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Texas Instruments. The P/E ratio is a useful cross-check for Texas Instruments because earnings are a key focus for income-oriented and long-term holders of the stock. Right now, Texas Instruments trades at about 42.4x earnings, very close to the peer group average of 41.3x and below the broader semiconductor industry average of 57.9x. That combination indicates that investors are paying a full, but not extreme, premium for its earnings compared with the sector as a whole. The tailored fair P/E ratio for Texas Instruments, which incorporates factors such as its size, margins and risk profile, is about 43.8x. With the current multiple only slightly below that mark, the gap between price and this earnings-based benchmark is small and does not point to a clear discount or stretch. On the P/E multiple, Texas Instruments stock currently appears roughly fairly valued compared with both peers and its modelled fair ratio. See what the numbers say about this price — find out in our valuation breakdown. Simply Wall St Narratives for Texas Instruments pick up where the valuation checks leave off by explaining what would need to happen to Texas Instruments' growth, margins and earnings for the stock to be priced meaningfully higher or lower than it is today. These Narratives are available on the company's Community page. Rather than focusing on a single P/E, DCF output or headline ratio, each Narrative lays out the underlying assumptions so you can compare them with the actual results as they are reported. Community views on Texas Instruments sit far apart, with some investors focused on long term capacity upside while others zero in on margin pressure and cash flow risk. Bull case: 36% undervalued Read the full Bull Case to see why Texas Instruments could be undervalued Bear case: 35% overvalued Read the full Bear Case to see why Texas Instruments could be overvalued Do you think there's more to the story for Texas Instruments? Head over to our Community to see what others are saying! For Texas Instruments, the Discounted Cash Flow (DCF) estimate points to the stock trading at a premium to intrinsic value, while the P/E-based view suggests pricing is roughly in line with peers and a tailored fair ratio. Broader valuation checks skew weak, so the overall picture looks more like a full price than a clear bargain. The key question from here is whether Texas Instruments can sustain the cash generation and margins implied by today's valuation, especially given its capital needs, or whether investors eventually demand a wider margin of safety. 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. Companies discussed in this article include TXN. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Monolithic Power MPWR is scheduled to report second-quarter 2026 earnings on July 30, 2026. The Zacks Consensus Estimate for sales and earnings is pegged at $903.7 million and $5.88 per share, respectively. Earnings estimates for MPWR have increased 0.54% to $24.18 for 2026, and increased 1.88% to $29.85 for 2027 over the past 60 days. Image Source: Zacks Investment Research The leading developer of advanced power solutions has a solid trailing four-quarter earnings surprise history, having exceeded expectations on all occasions. It delivered a four-quarter earnings surprise of 2.53%, on average. In the last reported quarter, the company delivered an earnings surprise of 4.29%. Image Source: Zacks Investment Research Our proven model predicts a likely earnings beat for MPWR for the second quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.Monolithic currently has an ESP of +1.00% with a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here. Monolithic is benefiting from growing demand for power management ICs used in AI servers, GPUs and accelerator platforms. This is expected to drive growth in the Enterprise Data segment. Beyond the increase in AI server shipments, Monolithic is also expanding the amount of semiconductor content it supplies within each system. Its Communications segment is expected to gain from strong demand for optical modules. AI networking switches and growing power density requirements are expected to drive growth in the Communications segment.Demand for storage-related products continues to benefit from the ongoing expansion of AI data centers. Higher deployments of solid-state drives, hard disk drives and advanced memory technologies are creating favorable conditions for Mesolithic’s storage-related power management portfolio. This factor is expected to compensate for weakness in the notebook demand to some extent. Monolithic has been securing additional design wins across vehicle electrification, advanced driver assistance systems, infotainment and connectivity applications. Positive trends across such diverse markets will likely have a favorable impact on Mesolithic’s second quarter earnings.The consensus estimate for revenues from the Enterprise Data vertical is pegged at $323.04 million, implying solid growth from $144 million in the year-ago quarter. The Zacks Consensus Estimate for net sales in the Communication segment is pegged at $127.14 million, suggesting growth from $73.8 million in the year-ago quarter.The Zacks Consensus Estimate for net sales from the Industrial vertical is pegged at $51.15 million, suggesting an improvement from the $46.7 million reported in the prior-year quarter.Revenues from the storage and computing vertical are expected to be $186.31 million, indicating a decline from the prior-year quarter’s tally of $195.3 million. Net sales from the automotive vertical are pegged at $155.46 million, indicating an increase from $145.1 million reported in the year-ago quarter. Over the past year, Monolithic’s shares have skyrocketed 80.6% in the past year compared with the industry’s growth of 51.2%. The company has outperformed its peers like Analog Devices ADI and Texas Instruments TXN. Shares of Analog Devices have jumped 61.1%, and shares of Texas have risen 47.7%. Image Source: Zacks Investment Research From a valuation standpoint, Monolithic appears to be trading at a premium relative to the industry but lower than its mean. Going by the price/earnings ratio, the company shares currently trade at 48.67 forward earnings, higher than 27.58 for the industry and lower than the stock’s mean of 61.42. Image Source: Zacks Investment Research MPWR is benefiting significantly from the rapid expansion of AI infrastructure spending, driven by strong demand for power management solutions used in AI servers, optical networking equipment and high-performance computing applications. Its strength in AI infrastructure is supported by its robust capability in high-power-density solutions, monolithic integration and advanced module designs.While peers such as Texas Instruments and Analog Devices also compete in the analog and power management semiconductor market, MPWR differentiates itself by offering single-piece silicon-based power solutions, unlike competitors that rely on multiple silicon components. This enables superior efficiency, compact designs and improved thermal performance, which are increasingly critical in next-generation AI servers and GPUs that are moving toward higher power requirements.Monolithic is also expanding its opportunities in memory-related applications through the introduction of high-speed DDR5 interface products. Emerging applications such as robotics and physical AI represent attractive long-term growth opportunities for Monolithic.The company also expanded manufacturing goals beyond its prior $4 billion capacity target and now aims to reach $6 billion of capacity in the near future. Its geographically diversified supply-chain strategy should support customer demand while improving supply flexibility amid changing trade conditions. Monolithic continues to broaden its addressable market through portfolio expansion and strong focus on innovation. Solid momentum in the Communications, Enterprise Data, Automotive and end markets will likely drive the top line. Higher adoption of power solutions for AI servers, optical modules and networking equipment is the primary growth catalyst. Investment in manufacturing capacity expansion and growing emphasis on supply chain diversification are positives. Owing to these factors, Monolithic is a good investment option at present. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Monolithic Power Systems, Inc. (MPWR) : Free Stock Analysis Report Analog Devices, Inc. (ADI) : Free Stock Analysis Report Texas Instruments Incorporated (TXN) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

If I ask anyone to name their favorite semiconductor stock, chances are, they’ll default to the big names like NVIDIA, AMD, or Broadcom. And I clearly see why. These companies have dominated the artificial intelligence landscape and have returned hundreds, if not thousands, of percent to shareholders. But some investors are looking for something different. Growth is always nice, but you can’t go wrong with reliable dividends on the side. After all, you can’t spend capital appreciation until you sell your shares. Markets move fast. Keep up by reading our FREE midday Barchart Brief newsletter for exclusive charts, analysis, and headlines. Thankfully, there are a handful of AI semiconductor companies that offer both growth potential and consistent dividends - some more consistent than others. So, today, let’s take a look at Texas Instruments and Qualcomm to see which dividend chip stock is the better buy today. Texas Instruments, better known as TI, is one of the world’s largest analog and embedded semiconductor companies. When I say analog here, I don’t mean those massive CRT TVs from the late 90s. Analog semiconductors are used for detecting continuous signals like voltage, current, temperature, sound, light, pressure, etc. Before AI, these chips were used for factory automation, medical devices, renewable energy systems, and other industrial facilities. However, with the arrival of the artificial intelligence boom, TI is now expanding its core products to meet demand for analog and power management chips. Basically, the company has created its own niche within the broader AI semiconductor industry instead of directly competing with traditional AI chip companies like Broadcom, Marvell, and NVIDIA. On the other hand, Qualcomm is stepping into the ring with those very same AI chip companies. While the company is better known for its Snapdragon processors for smartphones, it’s now expanding into AI data centers, among other things. Its recent Qualcomm Dragonfly portfolio was released alongside a multi-generation agreement to supply data-center processors to Meta. That kind of high-profile partnership is just what Qualcomm needed to step away from “that one smartphone CPU maker” identity. I’ve already laid out a few differences between the two companies. But there are some more, especially with how they make their money. Texas Instruments is almost entirely a semiconductor company. It generates the vast majority of its revenue by selling analog and embedded chips. Specifically, its Analog segment generated about 79% of its full-year 2025 revenue. Its expansion into AI positions the company as an infrastructure enabler. Its analog and power management chips are often used all throughout AI data centers. It’s even very likely that TI’s chips also run the grids and electricity generators powering said data center. The company also has microcontroller families used solely in Edge AI. Now, Qualcomm is similar to TI due to its Snapdragon chip line. However, it also generates money through licensing its wireless technology to device manufacturers. More recently, the company is developing AI computing platforms for smartphones, PCs, automated vehicles, and, of course, data centers. Its Snapdragon processors and AI Engine already power on-device AI experiences, while its recent Dragonfly portfolio marks its push into AI infrastructure. If I were to distill their differences at the most basic level, Qualcomm is building AI computing platforms while Texas Instruments takes more of an AI infrastructure enabler role. Also, both are fabless semiconductor companies, which means they outsource the actual chip manufacturing to companies like TSMC. So with the fundamental differences between Texas Instruments and Qualcomm settled, let’s talk about company fundamentals and how they translate into their stock prices. Right off the bat, Qualcomm is trading at an attractive 22x price-to-earnings (P/E) ratio. That means investors are paying $22 for every dollar the company earns. Honestly, it might even sound like a bargain, given that its sector’s median is around 32x. Remember, lower is better. It also has a price-to-sales (P/S) ratio of just around 4x, just a tiny bit below the sector median. However, its price-to-earnings-to-growth (PEG) ratio of 5x tells a different story. For those unaware, PEG measures the company's valuation relative to its expected earnings growth. The baseline is the number 1, and the lower the number, the better. This tells us that, despite Qualcomm's seemingly attractive valuation, the market isn't expecting its earnings to grow fast enough to fully justify that multiple. Now, to be fair, Texas Instruments isn’t really any better. P/E is at 38x, while P/S is 15x. That’s an expensive stock based on traditional valuations. However, its PEG ratio is 1.49. So although Texas Instruments appears expensive based on traditional valuation metrics like P/E and P/S, its expected earnings growth makes that premium easier to justify. Overall, though, Qualcomm looks like the better buy at current prices. Now, let’s get to the exciting part. Both companies pay relatively decent dividends and are actually in line to join the ranks of Dividend Aristocrats. The most basic eligibility criteria (among other things like being S&P 500 listed) for aristocracy here is 25 years of consecutive dividend increases. Texas Instruments has paid dividends for 64 straight years, but it’s only increased its payouts for the last 22. The company pays $5.68 per year, translating to around a 1.95% yield. However, it does have a worryingly high dividend payout ratio of 94%. That means the company distributes 94% of its earnings to shareholders. Good news for the shareholders, but bad news for reinvesting money back into its business- not to mention future increases. Coincidentally, Qualcomm has also increased dividends for 22 years straight. It pays $3.68, which translates to a 2.12% yield. But, the payout ratio is very reasonable at around 37%, which means the company should have more than enough to fund its future expansions- and the dividend. Now, let’s see how the experts see these two contenders. A consensus among 34 analysts rates TXN stock a “Moderate Buy,” with the high target price suggesting as much as 40% potential upside in the next 12 months. As for Qualcomm, a similar number of analysts rate it a “Moderate Buy.” The high target prices imply up to 83% potential upside. Despite mixed signals from certain metrics, Qualcomm offers the better combination of growth potential, valuation, and dividend sustainability. That’s not to say Texas Instruments is down and out. I think it still has room to grow. I don’t particularly like the fact that it uses almost all of its earnings to pay dividends. If profitability doesn’t improve, TI may one day face the hard choice of pausing increases or, worse yet, the dividend itself. On the date of publication, Rick Orford did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com