Texas Instruments and CoreWeave: Riding the Semiconductor and AI Cloud Waves Amid Macro Uncertainty

The tech sector is navigating a period of both promise and peril. While macroeconomic headwinds loom, two companies—Texas Instruments (TXN) and CoreWeave (CRWV)—are positioning themselves as leaders in their respective domains, leveraging secular trends to fuel growth. For investors seeking resilience and exposure to transformative industries, these firms offer compelling opportunities. Let's dissect their strategies and valuations.

Texas Instruments: The Analog Leader in a Semiconductor Renaissance

Texas Instruments has long been a stalwart in the analog semiconductor space, and its Q1 2025 results underscore why it remains a top pick in the sector. Revenue surged 11% year-over-year to $4.07 billion, with its analog segment—critical for automotive, industrial, and communications systems—driving a 13% revenue jump. The company's focus on high-margin markets is paying off: automotive and industrial segments, which now account for 70% of revenue, grew 11% and 13%, respectively.

Texas Instruments' cash flow resilience is a standout advantage. Despite $4.7 billion in capital expenditures over 12 months, trailing free cash flow remained robust at $1.7 billion, bolstered by $260 million in CHIPS Act incentives. This capital is funding a $60 billion domestic semiconductor manufacturing push, aiming to internally produce 95% of its wafers by 2030—a move that could slash costs and insulate it from geopolitical supply chain disruptions.

Analysts are bullish, with an average “Buy” rating and a 20% EPS CAGR through 2029. While risks like trade tensions and talent shortages exist, Texas Instruments' disciplined financial management—its net debt/EBITDA ratio of 1.32x is conservative—gives it the flexibility to weather volatility.

CoreWeave: The AI Cloud Hyperscaler Betting on Exponential Growth

CoreWeave's first-quarter results are a masterclass in hypergrowth. Revenue skyrocketed 420% YoY to $981.6 million, fueled by its $25.9 billion revenue backlog—a treasure trove of committed contracts, including a landmark $11.2 billion deal with OpenAI. The company's infrastructure expansion is staggering: it now operates 420 MW of active power, with 1.6 GW contracted, and has secured SemiAnalysis' Platinum ClusterMAX™ rating for its AI compute clusters.

Despite operating losses on a GAAP basis, CoreWeave's non-GAAP metrics tell a story of profitability potential. Adjusted EBITDA surged to $606 million (62% margin), while its IPO netted $1.4 billion to fuel data center scaling. The company's strategic moves—like its $9 billion all-stock acquisition of Core Scientific—are contentious, but they signal ambition in capturing the $150 billion AI chip market.

Analyst sentiment is mixed, but a handful of firms like Argus see $200+ upside, citing its backlog and AI infrastructure dominance. Risks include execution hurdles and dilution from the Core Scientific deal, but the company's $14.7 billion in remaining performance obligations (RPO) suggests demand is real.

Why Both Stocks Are Worth a Look Now

Secular Tailwinds:
- The semiconductor industry is projected to grow 11% in 2025, hitting $697 billion, with AI chips alone expected to exceed $150 billion. Texas Instruments' analog expertise and manufacturing bets align perfectly with this trend.
- CoreWeave's AI cloud platform is a direct beneficiary of the $500 billion AI accelerator market, as outlined by AMD's Lisa Su.

Valuation Opportunities:
- Texas Instruments trades at 21x forward P/E, below its five-year average of 24x, despite 20% EPS growth visibility. Its 2.5% dividend yield adds stability.
- CoreWeave's stock has dipped 9.6% recently due to valuation concerns, but its $25.9 billion backlog and 62% EBITDA margin suggest it's underappreciated.

Macro Resilience:
- Texas Instruments' 70% exposure to automotive/industrial markets—less cyclical than consumer electronics—buffers it from demand swings.
- CoreWeave's RPO and backlog provide visibility in an otherwise uncertain economic environment.

Investment Thesis

Texas Instruments is a “buy” for income and stability, offering a mix of growth and dividends in a sector poised for recovery. Its balance sheet and long-term manufacturing strategy make it a defensive play with upside.

CoreWeave is a “hold with a long-term view”, ideal for investors willing to tolerate volatility for exponential upside. While profitability remains elusive, its backlog and AI partnerships suggest it's building a moat in a critical infrastructure space.

Both stocks thrive in their niches: TXN as the analog powerhouse, CRWV as the AI cloud disruptor. Together, they form a balanced portfolio play on tech's next phase—semiconductors and AI at scale.

Final Take: In a world of macro uncertainty, bet on companies that own the tools of tomorrow. Texas Instruments and CoreWeave are writing the next chapter.