TXN's Analog Revenue Growth Picks Up: A Sign of More Upside?

Texas Instruments’ TXN analog segment accounts for semiconductor chips that change real-world signals like sound, temperature, pressure or images and feed them to digital brains like embedded processors.

Texas Instruments’ analog products can be categorized into high-performance analog, high-volume analog and logic, and power management, with applications across communication equipment, industrial and automotive sectors.

The analog segment accounts for a lion’s share of TXN’s top line and contributed to 77.6% of the company’s total revenues in the second quarter of 2025. The analog segment is also expanding at a rapid pace, growing 17.9% year over year.

Texas Instruments’ second-quarter 2025 analog segment revenues expanded mainly due to the emergence of 5G technology, boosting TXN’s analog products in the communication equipment market. TXN is also capitalizing on the traction in semiconductor chips due to broad industrial demand.

Per a report by the Semiconductor Industry Association, the global semiconductor market is demonstrating signs of robust growth, with an 18.8% year-over-year rise in sales in the March-end quarter of 2025, reaching $167.7 billion. These factors are likely to drive TXN’s top line. The Zacks Consensus Estimate for TXN’s 2025 and 2026 top line indicates a growth rate of 13% and 8.8%, respectively.

How Competitors Fare Against TXN

Analog Devices ADI is the second-largest producer of analog chips after Texas Instruments. Analog Devices’ strong market position in high-performance analog and digital signal processors for industrial, communications infrastructure and consumer markets overlaps with TXN’s product offerings.

NXP Semiconductors NXPI provides analog semiconductor products for automotive, industrial, IoT and custom analog interfaces. NXP Semiconductors’ analog solutions serve factory automation, home and building automation, appliances, home entertainment, power and energy, sensing technology for mobile and RFID for communication.

Although Texas Instruments faces strong competition from Analog Devices and NXP Semiconductors in the analog semiconductor space, the highly fragmented nature of this market provides ample growth opportunities to each of these players.

TXN’s Price Performance, Valuation and Estimates

Shares of Texas Instruments have gained 9.9% year to date compared with the Zacks Semiconductor - General industry’s growth of 33.4%.

From a valuation standpoint, TXN trades at a forward price-to-sales ratio of 10.03X, lower than the industry’s average of 15.91X.

The Zacks Consensus Estimate for TXN’s 2025 and 2026 earnings implies year-over-year growth of 7.7% and 14.8%, respectively. The estimates for 2025 and 2026 earnings have been revised upward in the past 30 days.

TXN currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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