Texas Instruments Gains Momentum with New Production Facility and Investor Activity

The semiconductor manufacturer Texas Instruments has entered 2026 with significant operational progress, underscored by a major manufacturing milestone and notable shifts in institutional ownership. While strategic investments are ramping up, recent insider transactions and prevailing market sentiment present a more nuanced picture for the stock.

A key development for the company is the transition of its SM1 fabrication facility in Sherman to high-volume production, which was finalized in late December. This plant is now producing 300-millimeter wafers, marking the culmination of a multi-year investment cycle. The move to internalize more production at this advanced node is central to the company's strategy of improving margins and reducing reliance on external foundries. The critical question remains whether this ramp-up can deliver the anticipated cost benefits and support the company's ambitious free-cash-flow targets, factors that will become clearer in subsequent quarterly reports.

Financial Performance and Forward Guidance

The company's most recent quarterly results provided a solid foundation. Revenue came in at $4.74 billion, a 14.2% year-over-year increase that surpassed the consensus estimate of $4.65 billion. Earnings per share (EPS) matched expectations at $1.48. For the upcoming period, management has issued EPS guidance in the range of $1.13 to $1.39.

A focal point for investors is the free-cash-flow target set by the leadership. The management team, including the CEO, is aiming for $12 per share for the fiscal year 2026. This objective notably exceeds the $9 per share previously advocated by some activist investors.

Diverging Signals from Major Investors and Insiders

Recent regulatory filings reveal contrasting actions among key stakeholders. On one hand, institutional investors have been building their positions. SteelPeak Capital increased its holding by 19.5%, adding 137,384 shares, while Eldred Rock Capital grew its stake by 11.8%, a purchase of 68,336 shares valued at approximately $12.55 million. These substantial buys are widely interpreted as a vote of confidence in the firm's long-term infrastructure strategy.

Should investors sell immediately? Or is it worth buying Texas Instruments?

Conversely, there has been some insider selling activity. A company Vice President sold 1,000 shares at a price of $164.31, and a member of the Board of Directors reduced their holding by 40.08%, selling 9,990 shares. These transactions offer mixed signals, preventing a clear, one-directional read on internal sentiment.

Strategic Flexibility and Market Context

Looking ahead, the company is maintaining a flexible approach for its next phase of expansion. The structure for the SM2 facility, also in Sherman, is complete. However, equipment installation will proceed on a "dynamic" basis, directly tied to observable market demand. This methodology is designed to prevent overcapacity and align capital expenditures with genuine sales opportunities.

The current market environment, as gauged by the CNN Fear & Greed Index, sits at a level of 39, indicating a state of "Fear." This broader sentiment factor adds another layer for investors to consider alongside the company-specific developments.

In summary, Texas Instruments is showcasing tangible operational progress with the SM1 ramp-up and has set clear financial targets. The execution of its manufacturing strategy—specifically, whether SM1 delivers the expected margin improvements and how prudently SM2 is scaled—will be the decisive factors for its long-term thesis.