Texas Instruments is no longer just building factories and waiting. The June quarter is the first clean print in which analog demand, factory loading, and cash conversion moved together after years of three-hundred-millimeter construction. Industrial, automotive, and data-center customers pulled more product, and gross margin expanded faster than revenue. Year-over-year sales rose 23 percent. The equity debate is whether that leverage is the start of a multiyear harvest or a midcycle bounce that already sits in a rich multiple.
Sherman's first fab entered production in late 2025. Analog outgrew the rest of the company, and operating profit grew 48 percent as factories absorbed more volume. Inventory days fell as shipments ate the buffer built in the trough. Cash generation recovered even as repurchase slowed to a trickle, because the dividend already consumes most of what is sent to owners. Incentive cash under the CHIPS statute flattered free cash flow, so the quality of the cash print is not as clean as the headline.
The next several quarters resolve whether industrial and automotive stay in a restock or fade once customers refill shelves. Third-quarter guidance sits above the June print, which implies demand has not rolled over. The Silicon Labs cash purchase is still slated for the first half of 2027 and is the other swing factor. Does analog leverage keep compounding after the cycle normalizes, or does the market already pay for a peak that has not been proven durable?