1 Top Tech Stock to Buy in October

Core Viewpoint - Texas Instruments is showing signs of a cyclical rebound in its semiconductor business, supported by a recent dividend increase and improving fundamentals, making it a timely investment choice for October [1][2]. Financial Performance - The company reported second-quarter revenue of approximately $4.45 billion, reflecting a 16% year-over-year increase and a 9% sequential rise [4]. - Gross margin was around 58%, with an operating margin near 35%, indicating a profitable business model [4]. - Revenue from analog and embedded processing segments grew by 18% and 10% year-over-year, respectively, with industrial market sales increasing in the upper teens and automotive market sales rising in the mid-single digits [5]. Dividend and Shareholder Returns - Texas Instruments raised its quarterly dividend by 4% to $1.42 per share, marking 22 consecutive years of increases, resulting in a dividend yield slightly above 3% [3]. - The company aims for long-term growth of free cash flow per share, which supports its commitment to returning capital to shareholders [7]. Market Outlook - Management guided third-quarter revenue to a range of $4.45 billion to $4.8 billion, indicating steady demand following a strong June quarter [8]. - CEO Haviv Ilan noted that low customer inventories and improving order turns suggest resilience in orders as the semiconductor sector normalizes [6]. Investment Considerations - The stock is trading at about 34 times earnings, which may not be considered a bargain, but the context of the industry cycle and the company's investment program should be taken into account [9][10]. - Despite some caution in the third-quarter outlook, the company is emerging from a downcycle with improving revenue trends and expanding gross margins, positioning it well for future cash generation [12].