Texas Instruments data center chip sales up over 90%, Heartland says

Heartland Advisors' second-quarter 2026 letter describes a market where gains were concentrated in technology infrastructure and semiconductor stocks, even as the indices suggested broadening participation. The firm's Opportunistic Value Equity Strategy returned 12.32% in the quarter, trailing the Russell 3000 Value Index's 14.02%, with positive security selection in nine of eleven sectors offset by negative selection in Technology.

Against that backdrop, the letter singles out Texas Instruments as a notable contributor. TXN is described as the world's largest analog semiconductor manufacturer, selling low-cost chips into autos, communications equipment, and industrial markets. Its data center power management business is the piece tied to AI infrastructure, supporting functions such as electrical power regulation and management.

What makes the letter's argument notable is where it places the emphasis. Heartland writes that even if abnormally strong data center growth continues for years, the industry will remain a relatively small share of total revenue through 2030. Instead, the firm points to the end of peak capital expenditures in TXN's multi-year fabrication buildout as the operational inflection that could lift relative performance. After the stock's rally, the letter says the business trades between Heartland's price target and its estimate of intrinsic value, though it remains less aggressively valued than many peers — a read that hinges on whether fab utilization actually translates into the profits and cash returns the firm expects.