Nvidia’s Networking Chief just revealed where he is convinced the next AI fortune could be made.
And here’s the best part… You don’t need to be a PhD, a Silicon Valley insider, or have millions of dollars in seed capital.
Gilad Shainer, Senior Vice President of Networking at NVIDIA, says: “A growing portion of the billions spent on AI [will land here].”
Jensen Huang, the CEO of Nvidia, agrees, calling it: “foundational to scaling AI.”
Yet, these tech titans aren’t talking about AI chips, chatbots, or anything like that. It’s a hidden AI play few are noticing, one that’s quietly becoming one of the fastest-growing cash streams in America today.
We just recorded a video on exactly where Nvidia’s Networking Chief says billions could flow next…
Warning: if you’re only focusing on chips and chatbot stocks, you will miss this entirely.
P.S. Nvidia just announced it will spend $500 billion over the next
4 years…But a massive chunk of that cash is headed somewhere surprising.
It’s not AI chips, chatbots, or anything similar. Yet Nvidia’s own Networking Chief says fortunes could be made here. Click here to watch the full story now.
Texas Instruments Executes a $7.5B Deal and an AI Strategy Pivot
By Jeffrey Neal Johnson. Originally Published: 2/7/2026.
Key Takeaways
- Texas Instruments' acquisition of Silicon Labs allows the company to fill its massive new fabrication plants with high-volume products, driving long-term profitability.
- Rapid expansion in the data center sector is fueling revenue growth as the company supplies essential analog chips required for artificial intelligence infrastructure.
- A transition from peak capital spending to cash generation secures the long-running streak of dividend growth and supports future returns to shareholders.
Semiconductor investors spent much of the past year waiting for the cycle to turn, but Texas Instruments (NASDAQ: TXN) decided not to wait. In early February 2026, the Dallas-based chipmaker signaled a major strategic shift. The stock has shown resilience, trading near its 52-week high of $224 per share despite a mixed earnings report.
Two catalysts have changed the stock's narrative. First, the company announced a blockbuster $7.5 billion acquisition designed to fill its new factories. Second, earnings showed that while the industrial sector is slowly recovering, demand from data centers is exploding.
The Silver Strategy Hiding Inside IRAs (Ad)
In 2000, I told Barron's that a popular dot-com stock was headed for trouble. It dropped 90%. Now I'm making the opposite call on that same company: buy it now. This stock has become the lifeblood of AI data centers, yet almost no one has caught the story. While the media focuses on AI chip wars, they've missed this company's essential role in building out data centers. Their hardware is so critical that a single building uses enough of it to stretch around the world eight times. If you own Nvidia, you might want to pivot. If you missed Nvidia, this is your second chance at the AI data center buildout happening worldwide.
See the under-the-radar play fueling AI data centersTexas Instruments is moving from a period of heavy spending into one of aggressive cash generation and growth. By using its fortress-like balance sheet to acquire competitors and by capitalizing on the artificial intelligence (AI) infrastructure boom, TI is positioning itself to outperform the broader market.
The $7.5 Billion Bet: Why TI Is Buying Silicon Labs
The headline for shareholders is the definitive agreement to acquire Silicon Labs (NASDAQ: SLAB). This all-cash transaction creates a clear path to expand in a competitive market. Under the deal, Texas Instruments will pay $231 per share, valuing the enterprise at about $7.5 billion.
Beyond the headline price, the strategic logic centers on long-term manufacturing efficiency rather than only near-term revenue. Over the past five years TI has invested billions building massive fabrication plants (fabs) in Sherman, Texas, and Lehi, Utah.
Those new plants are built for 300mm wafers. In the semiconductor industry, wafer size matters: a 300mm wafer is larger than the 200mm wafers many competitors use. Because TI can print more chips on a single 300mm wafer, the cost per chip falls by roughly 40%. But those fabs are only profitable when running at high utilization — they need volume.
That is where Silicon Labs fits. Silicon Labs is a leader in wireless connectivity for the Internet of Things (IoT). By acquiring them, TI gains access to high-volume product demand that can be produced in-house. TI plans a reshoring strategy that includes:
- Transferring production: moving Silicon Labs' manufacturing from external foundries into TI's internal 300mm fabs.
- Cutting costs: using the cheaper 300mm process to lower per-chip production costs.
- Realizing synergies: management projects this shift will generate $450 million in annual savings within three years.
By buying volume to fill its own factories, TI turns a strategic weakness (underutilized capacity) into a significant profit driver.
AI Power: Data Center Growth Offsets Industrial Miss
Alongside the acquisition announcement, Texas Instruments released fourth-quarter 2025 results that offered a good-news, bad-news mix. On the surface, the numbers were slightly soft.
- Revenue: $4.42 billion (up 10% year-over-year).
- EPS: $1.27 (missed estimates by $0.02).
An earnings miss often pressures a stock, but TXN shares held up because investors focused on where growth was occurring. The standout was the Data Center business.
Data Center revenue jumped roughly 70% year over year, driven by the global build-out of AI infrastructure. AI servers run hot and draw large amounts of power, so they require specialized analog chips to manage power efficiently. Texas Instruments is a dominant player in that power-management niche. While TI doesn't produce the expensive AI processors (such as those from NVIDIA (NASDAQ: NVDA)), it makes the essential components that allow those processors to operate.
That surge in AI-related demand helped offset softer results elsewhere. The Industrial and Automotive segments — which together account for nearly 75% of revenue — are still recovering. Management's guidance for the first quarter of 2026, forecasting revenue between $4.32 billion and $4.68 billion, suggests the industrial slowdown may have bottomed.
The Payoff: How Policy and Strategy Boost the Bottom Line
For conservative investors, the most persuasive argument to hold Texas Instruments is the rapid improvement in its financial health. The company is shifting from an investment phase into a cash-generation phase.
Free cash flow (FCF) is the key metric to watch — the cash a company produces after covering operating expenses and capital expenditures (CapEx). FCF is what funds dividends, share buybacks, and debt reduction.
In 2025, TI's FCF surged to $2.9 billion, a 96% increase from the prior year. That improvement stems from two main factors:
- Peak spending is behind it: CapEx peaked in 2025 at $4.6 billion. Management expects 2026 CapEx to fall to $2 billion–$3 billion. As capital spending declines, cash flow should continue to rise.
- Government incentives: Effective Jan. 1, 2026, TI began benefiting from a 35% Investment Tax Credit (ITC) under the U.S. CHIPS Act. That incentive effectively reimburses more than a third of certain equipment and construction costs, boosting the bottom line.
That financial pivot supports the dividend. Texas Instruments has increased its dividend for 22 consecutive years and currently pays $1.42 per share each quarter (about a 2.5% yield). With cash flow rising and spending falling, the company has plenty of room to sustain this streak, making it attractive for income-focused investors.
A Calculated Bet on Manufacturing and AI
TI is executing a deliberate long-term plan. After years of incurring high costs to build domestic manufacturing capacity, the company is now filling those fabs by acquiring Silicon Labs and shifting production in-house to higher-margin processes.
The acquisition carries execution risk — notably a long timeline, with a potential close in 2027 — but TI's near-term fundamentals are strengthening. The 70% jump in data center revenue shows TI is benefiting from the AI boom, while signs of stabilization in industrial markets limit downside risk.
For investors, the combination of rising free cash flow, a secure and growing dividend, and a clear path to higher profit margins makes the current valuation compelling. Texas Instruments appears to have pivoted from building for the future to capitalizing on those investments today.
This message is a sponsored message sent on behalf of StocksToTrade, a third-party advertiser of InsiderTrades.com and MarketBeat.
If you need help with your subscription, please email MarketBeat's U.S. based support team at contact@marketbeat.com.
If you no longer wish to receive email from InsiderTrades.com, you can unsubscribe.
© 2006-2026 MarketBeat Media, LLC. All rights reserved.
345 North Reid Place #620, Sioux Falls, SD 57103. U.S.A..
No comments:
Post a Comment