Janice R. Andrews
By 2026, Texas Instruments (TI) expects a large increase in free cash flow (FCF) due to both strategic capital investment changes and recovering demand. In response to pressure from activist investor Elliott Investment Management, the analogue chipmaker predicts that FCF per share would reach $8 to $12 in 2026, beyond analysts’ projections of $6.91, as reported by Visible Alpha.
Elliott, which disclosed a $2.5 billion investment in TI in May, pushed the business to reduce expenses and realign manufacturing capacity to meet demand fluctuations. According to the investor plan, by 2026, TI’s FCF may increase to $9 per share.
As a result, TI has started a bold strategy to increase internal manufacturing, which includes building three new chip plants. Following a protracted market downturn, the firm is seeing indications of rising demand, which is why it is expanding.
TI now anticipates capital expenditures to be between $2 billion and $5 billion in 2026, compared to its earlier goal of investing around $5 billion yearly in industrial growth through 2026. It will however stick to the $5 billion spending goal until 2025.
LSEG data shows that TI’s FCF per share fell 77% to $1.47 in 2023. Nonetheless, the business has a positive outlook for the future and projects sales of $20 billion to $26 billion by 2026.
