Evercore ISI analyst Mark Lipacis raised the price target on Texas Instruments (NASDAQ: TXN) to $316.00 (from $270.00) while maintaining a Outperform rating.

The analyst comments "TXN DC Up 90% YY in 1Q26. TXN reported 25% QQ growth and 90% YY growth in Data Center. Following our fab-tour of RFAB1 and RFAB2, we believe TXN will continue to see accelerated growth in its DC business due to its broad power chip portfolio and ability to scale capacity to nearly double its current revenue run-rate. Management indicated that ASSP design wins in VRM, Stage 1, and Stage 2 should contribute more meaningfully in 2H26 and into 2027. 1Q Beat, 2Q26 Outlook Upside. 1Q26 Revs of $4.8bn beat by 7% (+9% QQ, +17% YY). GM of 58% beat by 180bps, and EPS of 1.68 beat by 24%. Consistent with our checks, the company cited broad improvement in fundamentals, including increased expedites and a favorable pricing environment (TXN: 1Q26 EPS Preview: Buyers Into Print). TXN traded up by 11% after the market closed. 2Q26 Guidance. 2Q26 revenue outlook is for $5.2bn at the midpoint (+8% QQ vs 10yr seasonality +5%) which was 7% above consensus. Implied Gross Margins of 59.4% were 230bps above consensus. Outlook for 2Q26 EPS of $1.91 is $0.11 or 22% above the Street Gross Margin Upside. GMs were 180bps above consensus. We model 1Q26 GM increasing by 220bps due to better absorption of fixed costs on higher revenues, flattening depreciation expense, and higher factory loadings. DC and Industrial Growth. Industrial and data center remained the primary growth drivers, while automotive trends were mixed and personal electronics was broadly flat. Industrial revenue accelerated to +30% YY and +20% QQ, with strength described as broad-based across sectors and geographies and extending through March. Data center revenue increased by 90% YY and 25% QQ, marking an eighth consecutive quarter of sequential growth. Automotive revenue grew at MSD YY rate and was flat sequentially, as sequential weakness in China was offset by strength in ROW, consistent with prior cycle patterns in which automotive was among the last end markets to recover and peak. Personal electronics was flat YY and up LSD QQ, while communications equipment rebounded 25% YY and more than 30% QQ, but off a low base. Inventory Declining. Inventories declined by 13 days sequentially to 209, the first meaningful decline this cycle. Management noted it depleted some inventory while serving customers in line with real time demand."