Buffett Brain · Research note
Score updated 22 Oct 2026 · analysis from 2 Jun 2026
TXN· Technology
Texas Instruments
Texas Instruments is a wonderful analog-chip business with a 57% gross margin priced at a brutal 53 times earnings.
Buffett fit
Partial fit
Owner
86
Durability
54
Management
61
Price
0
Score updated 22 Oct 2026 · analysis from 2 Jun 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Technology stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
If you buy this stock you own a piece of one of the best analog franchises in the world, a business throwing off a 35.3% from a catalog of parts that customers rarely re-engineer once designed in.
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The durability of the franchise itself is real. A five-year of 25.1% tells you the factories and the product breadth earn their keep across cycles.
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Management has trimmed the share count by 0.4% a year, so they are returning cash rather than diluting owners, and that is the right instinct.
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There is no in this price, and I will not pretend otherwise.
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- The full reasoning behind all four pillars
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
7- 1Exceptional of 57.3% shows real across tens of thousands of analog parts.
- 2 of 35.3% is the mark of a business that converts sales into profit with little waste.
- 3Five-year of 25.1% proves the franchise earns far above its cost of capital across cycles.
- 4Strong balance-sheet liquidity with a current ratio of 4.46 and interest coverage of 11.7 times.
Concerns
7- 1Valuation is extreme: a ratio of 53.5 and an owner-earnings yield of just 0.9% leave no room for error.
- 2Earnings per share have shrunk at a 10.2% annual rate, so you are paying a premium price for a falling profit stream.
- 3Revenue is going backwards at 0.9% a year, evidence the business is in the trough of its cycle.
- 4Trailing has fallen to 17.5% from a five-year average of 25.1%, showing pressure from heavy spending.
Price history
$280+49.1%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
Texas Instruments designs and manufactures analog and embedded processing chips, tens of thousands of small parts that go into cars, factories, and electronics, most sold at a few dollars apiece with no single customer mattering much. That breadth and its owned U.S. factories give it a 57.3% and a 35.3% , the kind of profitability that comes from selling something everyone needs and nobody thinks about. The trouble lately is that revenue has gone backwards at a 0.9% annual clip and earnings per share have fallen at a 10.2% annual rate as the company spends heavily to build new fabs.
How this analysis has moved
The call has held across 5 reviews.
Sep 27, 2026 → Oct 22, 2026
What other investors would say
The same company, judged by three other documented playbooks.
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