When Will This Overlooked AI Breakout Stock Finally Get Its Moment?

The artificial intelligence investment surge is reshaping entire industries, but the real beneficiaries might not be the obvious ones. While everyone focuses on graphics processing units and high-profile AI platforms, there’s a critical layer of the infrastructure that rarely gets attention: the semiconductor components that keep these systems running safely and efficiently. Texas Instruments (NASDAQ: TXN) manufactures tens of thousands of these essential-but-invisible analog chips that power everything from data centers to autonomous vehicles. For years, this company has been out of sync with the broader market. But several factors suggest that Texas Instruments could finally emerge as a genuine breakout stock in the coming months.

The Puzzle: Why Texas Instruments Missed the AI Rally

Texas Instruments wasn’t always this quiet. From 2009 through 2021, the company was an exceptional wealth-builder for shareholders, delivering a 1,110% return compared to the S&P 500’s 427.7% gain. The dividend yield of approximately 3% sweetened the deal further. However, the semiconductor industry moves in cycles, and the company encountered significant headwinds starting in 2022.

The automotive sector—historically a major revenue engine for Texas Instruments’ analog components and sensors—contracted sharply as post-pandemic supply chains normalized. That slowdown rippled through the company’s financial results. While a recovery began taking shape in 2025, geopolitical concerns about tariffs on foreign-manufactured electronics dampened market enthusiasm and extended the recovery timeline. Investors, disappointed by the company’s underperformance relative to the AI boom, largely moved past Texas Instruments for trendier opportunities.

The challenge wasn’t fundamentals—it was perception. The company’s components remained as critical as ever; the narrative simply shifted elsewhere.

The Catalyst: Why Now Could Be Different

What’s changed recently? The demand for AI-capable infrastructure is accelerating faster than most anticipated. Looking ahead to 2026, capital investment in AI is projected to surge substantially, which directly benefits Texas Instruments across multiple growth channels: data centers, autonomous vehicle development, robotics, and industrial automation.

The numbers tell the story. During the first nine months of 2025, Texas Instruments reported 50% year-over-year revenue growth in its data center division alone. Management clearly saw opportunity in its depressed share price, committing $1.6 billion to stock repurchases and extending the dividend for 22 consecutive years. These actions signal confidence in the company’s trajectory.

The stock has already responded, gaining nearly 10% in 2026 so far—a sign that patient investors and institutional buyers are beginning to recognize the company’s position at the heart of the AI supply chain. For a company this size, that kind of momentum suggests the market has only scratched the surface of what’s possible.

Evaluating the Investment Case

Before making any decision, consider the track record of other AI-adjacent opportunities. Nvidia, when added to the Motley Fool Stock Advisor list on April 15, 2005, would have delivered returns of $1,133,229 on a $1,000 investment. Netflix, recommended on December 17, 2004, turned that same $1,000 into $482,451. The Motley Fool’s Stock Advisor portfolio has averaged 968% returns compared to 197% for the S&P 500.

That said, Texas Instruments did not make the most recent top 10 stock list from Motley Fool Stock Advisor—suggesting the analyst team sees stronger opportunities elsewhere. The breakout potential is real, but so is the competitive landscape. Investors should weigh the company’s fundamental strength, its exposure to accelerating AI investment, and its attractive dividend against the many other compelling options in the market.

For investors seeking exposure to the less glamorous but essential infrastructure of artificial intelligence, Texas Instruments presents a compelling thesis. The company has the right components, the right market timing, and the right financial tailwinds. Whether it fully delivers on that potential will depend on execution and broader economic conditions. But the setup for a genuine breakout stock moment is undeniably in place.