Texas Instruments (NASDAQ:TXN | TXN Price Prediction) heads into Q2 2026 results on July 22 with a one-sided setup: Management’s own guidance points to a step-change quarter, free cash flow is inflecting and the two end markets driving the quarter (industrial and data center) are accelerating into the release rather than fading.
Start with the catalyst. Management guided Q2 revenue to $5.00 billion to $5.40 billion and EPS of $1.77 to $2.05, a midpoint that represents roughly 8% sequential growth, slightly above seasonal. TXN has beaten revenue in three of the last four quarters and Q1 2026 blew the doors off with a 23.15% EPS beat that triggered a 19.43% day-of pop. Polymarket traders now assign an 80.5% probability that Q2 Analog revenue clears $4 billion.
Industrial and Data Center Are Doing the Heavy Lifting
Second, the end-market mix is compounding. In Q1 2026, industrial revenue rose more than 30% year over year and data center revenue was up roughly 90% year over year. CEO Haviv Ilan told analysts, “The combination of a broad portfolio, ability to support the rack and the board, ability to supply at scale, and a geopolitically dependable location is unique and not easy to replicate.” Industrial demand is still 15% below the 2022 peak, so the recovery has real runway before it hits a wall.
Cash Generation Has Inflected
Third, the cash flow story is the reason retirement-focused investors get paid to wait. Trailing twelve-month free cash flow reached $4.4 billion, up from $1.7 billion in 2025. Q1 2026 free cash flow alone jumped 610% year over year as capex moderated. Ilan told the Street, “Assuming we do not have another false start, it is very likely we will be at $8 free cash flow per share for 2026.” TXN returned $6 billion to shareholders over the trailing twelve months and continues to bank CHIPS Act support, including $555 million in direct Q1 funding for the Sherman, Texas 300mm fab.
The stock is already confirming the story. As of Monday, July 13, shares are up nearly 69% year to date. The internal AI model price target sits at $340.43, above the Wall Street consensus of $298, and 17 Buy ratings outweigh the two Sell ratings.
The story to watch heading into the July 22 close: whether TXN’s guide-and-beat pattern holds one more time.
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