Key Takeaways
Seaport Research Partners upgraded Texas Instruments to Buy from Neutral on Friday, setting a $400 price target that implies a 29 percent upside as demand for power management chips in AI data centers accelerates.
“Growing power demand and electrical intensity per rack is driving data centers to re-architect the way in which they distribute electricity,” Seaport analyst Jay Goldberg said in a note. “This is expected to prompt a surge in demand for power analog semis.”
The upgrade follows a 90 percent year-over-year jump in Texas Instruments’ data-center revenue during the March quarter. Seaport expects the total addressable market for these analog power chips to grow from $5 billion today to $15 billion by 2030, driven by the buildout of more power-intensive AI servers. The firm’s new $400 target is among the highest on Wall Street.
Shares of Texas Instruments (TXN) rose 4.2 percent to $311.02 on the news, extending a 76 percent year-to-date rally. The upgrade reframes the company as a key beneficiary of the AI infrastructure boom, shifting focus from a cyclical industrial recovery to a structural growth story.
The bullish call from Seaport highlights a growing theme on Wall Street: the AI boom's impact extends beyond high-profile GPU makers like Nvidia to critical component suppliers. Texas Instruments, which manufactures analog and embedded chips, provides essential power management, signal conversion, and cooling equipment for data centers.
In the first quarter, the company's data center business reached a revenue run-rate of over $1.2 billion, surging 90 percent year-over-year and 25 percent sequentially. This growth is happening alongside a recovery in its core industrial market, where revenue grew more than 30 percent.
Other analysts have also taken note of the momentum. Mizuho’s Vijay Rakesh recently lifted his price target on TXN to $300 from $255, citing AI-driven tailwinds. The company's strong position is further supported by a recovering cash flow profile, with trailing 12-month free cash flow rising to $4.4 billion from $1.7 billion a year earlier.
The Seaport upgrade provides a new valuation anchor for investors, focusing on the long-term revenue potential from next-generation 800-volt data center architectures. Investors will now watch for the company’s second-quarter earnings, where revenue is guided between $5.0 billion and $5.4 billion, to confirm if the outsized data-center gains can be sustained.
This article is for informational purposes only and does not constitute investment advice.
