From GPUs to simulation chips: How TXN becomes an invisible beneficiary of AI data centers

A particularly noteworthy point is that on April 22, 2026, Texas Instruments (NASDAQ: TXN) released its Q1 2026 earnings report: revenue of $4.83 billion, up 19% year-over-year, surpassing market expectations of $4.52 billion; earnings per share of $1.68, up 31.3% year-over-year, about 22.6% higher than the consensus estimate by Zacks. On the day of the earnings release, Texas Instruments' stock soared approximately 19%, marking one of the largest single-day gains since 2000.

As of June 17, 2026, TXN closed at $305.71, with an intraday trading range of $299.24 to $311.73, a market capitalization of about $278 billion, and a P/E ratio of approximately 51.3 times. Since the beginning of the year, the stock has gained roughly 76.5%.

Founded in 1930, this semiconductor giant has long focused on analog chips and embedded processing chips as its core business, with products widely used in industrial, automotive, data centers, and personal electronics. During the past two years, dominated by GPU-led AI narratives, analog chips were once viewed by the market as "traditional hardware"—indispensable but lacking imagination. However, the performance in Q1 2026 proves a different logic: the expansion of AI data centers not only requires compute chips but also analog chips that manage power, transmit signals, and ensure system stability. Texas Instruments, with its better-than-expected financial performance, is benefiting from this structural shift.

TXN Q1 2026: How Surprising Results Are Composed

Breaking down Texas Instruments' Q1 2026 financial data, the outperformance is reflected across multiple dimensions.

In terms of revenue, the $4.83 billion quarterly revenue not only exceeded analyst expectations of $4.52 billion but also achieved a 19% year-over-year growth and a 9% quarter-over-quarter increase. The profit performance was even more impressive—operating profit reached $1.81B, accounting for 37.5% of revenue, up 37% YoY; net profit was $1.55B, up about 31% YoY. The profit growth rate significantly outpaced revenue growth, indicating improvements in gross margin and effective operational leverage.

From a business structure perspective, Texas Instruments' growth was not driven by a single sector. Management highlighted during the earnings call that the dual engines behind the Q1 outperformance were the recovery in industrial demand and explosive growth in data center business. Notably, the data center-related segment achieved approximately 90% YoY growth in Q1—an extremely rare figure among analog chip companies, directly addressing the market’s core question: "Can analog chips benefit from AI?"

The AI Logic of Analog Chips: Why TXN Can Profit from AI Without GPUs

To understand why Texas Instruments can benefit from the AI wave, it’s essential to clarify the specific role of analog chips in data centers.

The power consumption of AI data centers is rising exponentially. For example, NVIDIA’s fiscal Q1 2027 data center revenue reached $75.2 billion, with total quarterly revenue of $81.6 billion, up 85% YoY. Supporting such massive compute clusters, power management and signal transmission become core infrastructure challenges. Bank of America projects that by 2030, the global AI data center system market will exceed $1.7 trillion, more than six times the $264 billion in 2025.

In this expansion, the value chain of analog chips is clearly visible. UBS estimates that the AI data center power semiconductor market will grow from about $1.5 billion in 2025 to approximately $2.5 billion in 2026. Bank of America further states that the total addressable market for AI analog semiconductors will grow from $7.9 billion in 2025 to $27 billion by 2030, with a five-year CAGR of 28%. Within this, the demand for analog chips inside data centers (from racks to core) will increase from $7.6 billion to $25 billion.

Texas Instruments is a key beneficiary of this trend. The company had already forecast in January 2026 that Q1 revenue and profits would surpass Wall Street expectations, driven by the growing demand for analog chips in AI data centers. Unlike the GPU market, which is dominated by a few players, the analog chip market is relatively fragmented. Texas Instruments leverages its deep expertise in power management and signal chains to maintain a competitive edge.

Another critical structural change is the tightening of industry supply. According to data from Jibang Consulting, in Q4 2025, global wafer fab capacity utilization rates had rebounded to 90%, with 8-inch process lines operating at full capacity. The mature 8-inch capacity, long relied upon for analog chips, has been shrinking as leading foundries pursue higher margins. Meanwhile, demand from AI data centers and servers continues to grow, creating a supply-demand squeeze. In the first half of 2026, major analog IC manufacturers like Infineon and STMicroelectronics have begun raising prices. In this context, Texas Instruments, as an IDM (integrated device manufacturer) with its own capacity, benefits from stable supply and cost control, forming additional competitive barriers.

Free Cash Flow Turning Point: End of a Six-Year Capital Expenditure Cycle

Another noteworthy signal in Texas Instruments’ Q1 2026 earnings is cash flow. The company’s free cash flow over the past 12 months reached $4.35 billion, a significant increase from $1.72 billion a year earlier. During the same period, the company spent $3.9 billion on R&D and SG&A, $4.1 billion on capital expenditures, and returned $6 billion to shareholders.

This improvement in free cash flow is not accidental. Texas Instruments’ six-year capital expenditure cycle, initiated in 2020, is expected to end in 2026. As new 300mm production lines are gradually completed, capital spending will decline from its peak—Stifel estimates total capex will fall from $2.39 billion in 2026 to $2.2 billion in 2027. Meanwhile, with demand recovering and capacity utilization rising, operating cash flow continues to improve.

Analysts project that in the 2026 calendar year, Texas Instruments’ per-share free cash flow will be in the range of $8 to $12. Under a base scenario, Stifel forecasts per-share free cash flow will increase from $8.13 in 2026 to $9.60 in 2027 and $10.61 in 2028. The improvement in free cash flow provides a solid foundation for shareholder returns— the company has committed to returning free cash flow via dividends and share buybacks.

Gate’s New Stock Trading Channel: TXN Perpetual Contracts Officially Launch

For crypto users interested in Texas Instruments’ investment opportunities, an important product update arrived in June 2026.

On June 1, 2026, Gate officially launched real stock trading services, allowing users to directly trade stocks and ETFs listed on NASDAQ, NYSE, and other major markets using USDT within the platform. As of June 17, the Gate stock platform has fully covered U.S. and Hong Kong markets, supporting over 11,500 stock-related assets. Among these, over 10,000 are U.S. stocks from NYSE, NASDAQ, and other major exchanges; the initial Hong Kong stock offering includes more than 1,500 stocks.

The core logic of Gate’s stock trading product is to buy and sell real stocks directly with USDT. Users no longer need to go through the traditional process of "selling coins → withdrawing fiat → cross-border remittance → opening a brokerage account and depositing funds." Instead, they can transfer USDT from their account directly into a stock account and make a purchase with one click. The platform partners with Alpaca, a licensed U.S. broker-dealer, ensuring that each share bought is backed by real assets held in the DTC system. During holding, users automatically enjoy full shareholder rights, including dividends, stock splits, and rights issues.

For users wishing to invest in TXN, Gate offers two paths: via the TradFi section, holding actual TXN shares and enjoying shareholder rights; or via the contract stock section, trading TXN perpetual contracts settled in USDT, with leverage options for long and short positions. Real stock trading supports fractional shares as low as 0.01 shares, allowing participation with as little as $1; contract trading is suitable for investors confident in TXN’s short-term trend and seeking to amplify capital efficiency.

Both paths share the same account system, allowing users to choose or combine according to their risk preferences and investment goals.

Conclusion

Texas Instruments’ Q1 2026 performance provides clear empirical evidence for the market proposition: "Are analog chips benefiting from AI?" With quarterly revenue of $4.83 billion, 31% net profit growth, and $4.35 billion in rolling free cash flow, it sketches a picture of a traditional semiconductor company finding new growth trajectories in the AI era. The logical chain is straightforward: the expansion of AI data centers not only boosts GPU demand but also exponentially increases the need for analog chips managing power and signals. The end of a six-year capital expenditure cycle further supports the ongoing improvement in free cash flow and shareholder returns.

For investors, Gate’s launch of real stock trading and TXN perpetual contracts in June 2026 offers new channels to participate in this theme. Whether through long-term holdings of real stocks or short-term trading of contracts, users can operate within a single account system using USDT.

Markets are always re-pricing—sometimes not the technology itself, but the supporting systems behind it. Analog chips are currently undergoing such a revaluation.