Companies that have invested heavily in artificial intelligence (AI) have been on a tear lately, with stocks like Nvidia and Alphabet handily outperforming the S&P 500 in 2025.
That success has spread to many infrastructure and manufacturing stocks that could benefit from the AI boom, with power and cooling systems manufacturer Vertiv, data connectivity equipment provider Arista Networks, and computer memory chipmaker Micron Technology all crushing the market's performance over the last three years.
However, there's one company that the AI boom seems to have overlooked. Its stock has badly underperformed the market in recent years, and yet it could soon turn out to be the purest play on AI infrastructure.
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Chips, but not those chips
Nvidia reigns supreme over all AI chipmakers, with unrivaled success in producing high-end graphics processing units (GPUs). However, it takes more than just one kind of microchip to make AI work. Just ask Micron Technology, which primarily makes memory chips -- they're not as glamorous as Nvidia's top-of-the-line processors, but still vital to keeping data centers (and automobiles) operational.
Even more important are analog chips, which are the vital computer components that nobody really thinks about -- things like switches, sensors, buffers, transmitters, receivers, and amplifiers. They may not get talked about as much as Nvidia's GPUs, but they are every bit as crucial to AI systems as server racks, cooling fans, or copper wires.
More than 80,000 of these crucial AI building blocks are manufactured by Texas Instruments (TXN 4.36%). And it could soon be close to a pure-play AI infrastructure company.
Electronic systems may soon be AI systems
Like Vertiv, Arista, and Micron, Texas Instruments serves a number of industries. One is AI-focused data centers, where its networking, power management, and thermal management semiconductors are necessary components. The company's products are also crucial to industries where AI is expected to have a big impact in the future.
The biggest of these is automaking. Cars require a number of analog chips for their electrical, powertrain, and infotainment systems, among others. And the development of advanced AI features like automatic braking, advanced driver assistance, and autonomous driving will require added electrical and sensor components.
Texas Instruments' products are also used in industries including aerospace and defense, building and industrial automation, robotics, communications, and personal electronics, all of which are expected to invest substantially in AI features and integration in the coming years. It's not a stretch to say that before long, the bulk of the chipmaker's customers may be integrating AI into their products, which will almost certainly require the addition of systems requiring more analog semiconductors.
NASDAQ: TXN
Key Data Points
A rough few years
But we're not there just yet. Texas Instruments has strongly underperformed the market over the last five years.
This has partly been due to factors outside the company's control, including supply chain issues, a weak automotive market, and uncertainty over tariffs weighing on revenue and margins. The company is also embarking on a $60 billion fabrication center that will eventually increase its manufacturing capacity but is currently eating into its free cash flow.
Despite these challenges, AI is already a bright spot for Texas Instruments, which reported year-over-year revenue growth from data centers of more than 50% for the first nine months of 2025. That was so strong that management is going to begin reporting it as a separate segment starting this quarter.
Management has continued to make shareholder-friendly moves despite the stock's recent underperformance, including raising the dividend -- which currently yields 3.2% -- for the 22nd consecutive year and buying back $1.6 billion in stock in the first nine months of 2025. It may still take some time before Texas Instruments is able to fully capitalize on the AI boom, but the pieces seem to be in place.
Now looks like a good time to invest in this potential AI powerhouse before the AI-hungry market catches on.
