Texas Instruments (NASDAQ:TXN | TXN Price Prediction) reports Q1 2026 results today after the market closes. With data center revenue accelerating and a massive manufacturing buildout nearing completion, the question is whether the AI boom is finally reshaping this analog giant’s bottom line in a durable way.
Analog Strength Meets a New Demand Driver
Last quarter, Texas Instruments delivered revenue of $4.423 billion, up 10.38% year over year, while EPS came in at $1.27 against a $1.31 estimate, a 3.05% miss. The shortfall was partly mechanical. Rising depreciation from the 300mm manufacturing expansion, $537 million in Q4 2025 versus $416 million in Q4 2024, compressed net income even as revenue and operating cash flow climbed.
The more important signal came from the data center segment. CEO Haviv Ilan disclosed that “data center grew around 70% year on year and mid-single digits sequentially” in Q4, reaching $1.5 billion for full-year 2025, up 64% year over year and representing 9% of total revenue. That is a meaningful shift for a company historically anchored in industrial and automotive chips. TXN shares have responded: the stock is up 65.21% over the past year and 35.27% year to date.
Consensus Estimates for Q1 2026
| Metric | Q1 2026 Estimate | Q1 2025 Actual | YoY Growth |
|---|---|---|---|
| EPS | $1.35 | $1.28 | — |
| Revenue | $4.50B | $4.069B | — |
| FY 2025 EPS (actual) | $5.45 | +4.21% net income YoY | |
| FY 2025 Revenue (actual) | $17.682B | 10.6% | |
Estimates reflect the midpoint of management’s own Q1 2026 guidance range of $4.32 billion to $4.68 billion in revenue and $1.22 to $1.48 in EPS. Prediction market traders currently assign a 73% probability that TXN beats today.
Data Center Momentum and the Depreciation Drag
Two metrics stand out heading into today’s report: the pace of data center growth and the trajectory of depreciation. Ilan said he expects data center to “continue to grow in Q1” and noted TXN “left the year at about $450 million a quarter revenue footprint” in that segment. If Q1 shows another sequential step-up, it confirms that AI infrastructure spending is becoming a structural revenue driver, not a one-quarter spike.
The analog segment remains the backbone. It has posted 13% to 18% year-over-year revenue growth in every quarter of 2025, with operating profit growing even faster. Whether that range holds or compresses in Q1 will be a key signal, because any margin softness there would raise questions about pricing power across TXN’s 80,000-product catalog.
On the cost side, CFO Rafael Lizardi guided for depreciation of $2.2 billion to $2.4 billion for full-year 2026, up sharply from prior years. That is the price of the Sherman, Texas, fab buildout, which Ilan described as “ramped ahead of schedule, high yield” with throughput exceeding original expectations. The CHIPS Act provides some offset: the investment tax credit rate rose to 5.5%, meaning a larger share of 2026 CapEx comes back to TI.
Management tone will matter as much as the numbers. In Q2 2025, TXN beat EPS by 6.36%, and the stock still fell sharply on cautious commentary. Ilan has sounded more confident since, calling the inventory and capacity position “a very good position as we come into 2026.” Whether that tone holds after Q1 will drive the immediate stock reaction as much as the headline numbers.
A Pivotal Quarter for the AI Narrative
Texas Instruments is not a pure-play AI name, but data center is now 9% of revenue and growing at 64% annually. Today’s report is the first real test of whether that growth rate is sustainable into 2026. If TXN delivers on the numbers and Ilan maintains a constructive tone on industrial recovery and data center demand, this quarter could cement the stock’s re-rating as a legitimate AI beneficiary alongside its analog cyclical identity.
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