Texas Instruments Inc

Texas Instruments was one of the Fund’s top-performing stocks, driven by a very strong earnings print that exceeded expectations and pushed shares up 19.4% on the day of results. Management highlighted stabilising demand trends, improving factory utilisation, and a clearer path to free cash flow recovery. The industrial business, which is the company’s largest end-market, showed significant growth, with Q1 revenue growing 19% year-on-year. The combination of an accelerating industrial recovery and emerging AI-related growth reinforced investor confidence that the business is entering a stronger phase of the cycle.

We recently initiated a position in Texas Instruments (TXN), the leading analog semiconductor manufacturer. The company is coming out of a six-year investment cycle, having spent $20 billion building out state-of-the-art semiconductor fabrication capacity that should drive higher volumes and improved profitability. At the same time, the analog market is emerging from a prolonged downturn and beginning to recover. The combination of a cyclical upturn and structurally improving cash flows creates a compelling opportunity.

Texas Instruments Incorporated (TXN) has benefited from AI-driven demand for analog power and processing chips, supporting the business's growth. The manager remains constructive on TXN's ability to navigate the broader cycle, indicating confidence in its long-term prospects. Despite trimming the position on recent strength to manage semiconductor concentration, the overall outlook for TXN is positive, reflecting its strong market position and the ongoing demand in the semiconductor sector.

Texas Instruments, a global supplier of analog and embedded semiconductors, reported strong results and a good outlook due to the combination of strong end market conditions and accelerating demand for products used in datacenters. This positions the company well to benefit from the ongoing trends in AI and data center growth, reinforcing its competitive advantage in the semiconductor space.

Texas Instruments enjoyed an AI-halo as strong demand for data center-related equipment supplemented a broadening recovery across TI’s large portfolio of analog semiconductor products. This indicates a favorable outlook for the company as it benefits from the ongoing growth in AI and data center investments, positioning it well within the semiconductor industry.

Texas Instruments enjoyed an AI-halo as strong demand for data center-related equipment supplemented a broadening recovery across TI’s large portfolio of analog semiconductor products. This indicates a robust position within the AI ecosystem, suggesting that the company is well-placed to benefit from ongoing trends in technology and demand for its products.

The letter mentions Texas Instruments in the context of portfolio management, noting that the position was trimmed after share price gains made it oversized in the portfolio. However, there is no explicit argument made about the company's future performance or valuation.

Texas Instruments was mentioned as one of the top contributors year-to-date based on relative performance vs. the benchmark, but no specific argument or directional stance was provided regarding its future performance or valuation.

Texas Instruments was among the Fund’s stronger performers over the period, driven by results that signalled improving end-market trends following a period of sluggish sales caused by a cyclical downturn. The company reported fourth quarter revenue growth of 10% year-on-year, in line with expectations, alongside better-than-expected free cash flow and guidance that was modestly ahead of seasonal trends. Importantly, results pointed to a broadening recovery. The data centre segment grew c.70% year-on-year for FY25, emerging as a credible growth driver for the company. Texas Instruments remains a high-quality semiconductor business with strong positions in analogue and embedded processing. While tariff uncertainty, a weaker macro backdrop and rising capital expenditure have negatively weighed on sentiment in recent years, the combination of improving fundamentals, clearer signs of a cyclical recovery and easing capital intensity have driven a more constructive outlook for the stock.

We continue to be optimistic on trends in the semiconductor sector and added a new position during the quarter in Texas Instruments, a company focused on analog semiconductor devices and embedded processing. The company sells products with long life cycles to a diversified customer base and has a unique free cash flow story. While the company’s cash flow has been depressed by sluggish demand and elevated capex, we believe cash flow can inflect meaningfully as both of those trends reverse. We also view Texas Instruments as well positioned for an improving manufacturing outlook as 30%–40% of its customer base is in industrials.