Texas Instruments shares closed at a multiple near the company's highest level in a decade on October 19, 2026, sitting well above the S&P 500 average. The stock has outperformed the broader market significantly, rising 60.4% over the twelve months leading to that date, compared with a 16.8% gain for the S&P 500.
This valuation expansion has been driven by a sharp acceleration in sales growth, which investors have linked to data center demand. Revenue growth slowed through the first three quarters of fiscal 2025, dropping from 16.4% in the second quarter to 10.4% in the fourth. The trend reversed in fiscal 2026, with revenue climbing 18.6% in the first quarter and rising 22.8% to $5.46 billion in the second quarter.
Reuters attributed the stock's most significant price jumps to expectations for artificial intelligence and data center infrastructure. On January 28, 2026, shares closed 9.9% higher after a first-quarter outlook signaled robust demand from AI data centers. The stock posted its largest one-day gain in the past year on April 23, 2026, climbing 19.4% after Texas Instruments reported first-quarter results and forecast second-quarter revenue above Wall Street estimates. During the fiscal second-quarter call in July, management stated that data center revenue had doubled from a year earlier.
The company has also improved its profitability profile during this period. Over the twelve months ending June 30, 2026, revenue grew by 16.7%, while the operating margin expanded to 38.1% from 34.9% in the prior year. Free cash flow surged to $5.36 billion over the same twelve-month span, up from $1.5 billion.
However, the current margin levels have not yet returned to historical peaks, creating a valuation gap for investors to consider. Revenue of $19.5 billion in the twelve months to June 2026 is roughly equivalent to the $19.6 billion reported four years earlier. In that earlier period, Texas Instruments operated with a significantly higher operating margin of 52.7%, while its shares traded at just 16.5 times earnings.
The stock price has run ahead of this earnings recovery, with the trailing multiple reaching a record high of 44.9 times at the end of June 2026, the highest quarter-end level since 2016. The operating margin in fiscal second-quarter 2026 stood at 42.6%, a figure that remains below the levels seen four years ago.
Investors will look to the next quarterly report for further evidence on whether margins are closing this gap. Texas Instruments is expected to report results on or around October 21, 2026.