TEXAS INSTRUMENTS INC

Premier analog/embedded franchise with elite margins and returns; free cash flow is temporarily compressed by the fab-capex cycle but recovering.

Strengths

• Elite margins and returns — operating margin 34.1% (95th), ROE 30.7% (90th), net margin 28.3% (91st)
• Strong cash generation — OCF margin 40.5% (91st), FCF $2.60B (93rd)
• Durable competitive model — MD&A: strategy built on maximizing long-term free-cash-flow-per-share via analog/embedded advantages

Risks

• Elevated leverage from capex build — D/E 0.83 (89th)
• FCF margin temporarily depressed by 300mm fab investment — 14.7% (64th)
• Semiconductor cyclicality and ~60% international revenue — qualitative (per 10-K)

Notable findings

• Customer concentration~60% of revenue from one customer/distributor — About 60% of our revenue comes from customers with headquarter locations outside the United States
• Exec changeRecent 8-K item 5.02 8-K ↗
• Fund exitedNotable fund(s) exited this quarter: VANGUARD GROUP INC
• Strong balance sheetStrong balance sheet — $4.9B cash & investments
• Insider sellingInsider selling — 42 open-market sale(s) by 17 insider(s) (cluster of 17 insiders, ~$115M, last 6mo) Form 4 ↗
• Notable holderHeld by 5 notable fund(s): STATE STREET CORP, GOLDMAN SACHS GROUP INC, FMR LLC +2 more (as of 2026-03-31)
• China exposureAdditionally, the loss or significant curtailment of purchases by one or more of our large customers, including curtailments due to a change in the design or manufacturing sourcing policies or practic