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Last Updated: 2 August 2026

Arista Networks sells Ethernet switching into the largest data centres in the world, and has ridden the AI build-out from $2.9bn of revenue in 2021 to $9.0bn in 2025. It carries no debt, holds over $12bn of cash and marketable securities, and converts roughly 47% of every dollar of sales into operating profit on a non-GAAP basis. It also draws 42% of its revenue from two customers and now faces Nvidia at parity in its core market. This report sets out what the company reported, what management has guided, and what the raw valuation numbers look like as of August 2026. It contains no analyst opinions, price targets or ratings. Note that Q2 2026 results are due after the US close on 4 August 2026 and are not reflected below.

1. Company Snapshot

Field	Value
Legal name	Arista Networks, Inc.
Ticker / exchange	ANET / New York Stock Exchange
Headquarters	5453 Great America Parkway, Santa Clara, California 95054, USA
Sector / industry	Technology — computer communications equipment; data centre, AI and campus Ethernet networking
CEO / Leadership	Jayshree Ullal — Chairperson, President and Chief Executive Officer. Chantelle Breithaupt — SVP and Chief Financial Officer. Todd Nightingale — President and Chief Operating Officer. Kenneth Duda — President and Chief Technology Officer, co-founder. Andy Bechtolsheim — Chief Architect and holder of more than 10% of the company
Employees	Approximately 5,115 full-time employees worldwide at 31 December 2025. None unionised
Revenue (FY2025)	$9,005.7m, up 28.6% year on year
Net income (FY2025)	$3,511.4m GAAP; $3,806.0m non-GAAP
Share price	$180.35 at the close on 31 July 2026
Market cap	Approximately $227.1bn (2 August 2026)
Dividend	None. The 10-K states the company has never declared nor paid any cash dividend and does not anticipate doing so in the foreseeable future
Shares outstanding	1,259.2m, split-adjusted, at 31 March 2026
Founded / IPO	Founded 2004 as Arastra, Inc. by Andy Bechtolsheim, David Cheriton and Kenneth Duda; renamed Arista Networks in October 2008; IPO on the NYSE in June 2014
Stock split	Four-for-one forward split, charter amendment filed 3 December 2024, split-adjusted trading from 4 December 2024. All per-share figures in this report are on that split-adjusted basis

2. Bull and Bear Case

Bull Case

• AI networking is compounding and guidance keeps rising: FY2026 revenue guidance was raised on 5 May 2026 to approximately $11.5bn, implying 27.7% growth, from approximately $11.25bn, and the FY2026 AI fabrics target was raised from $3.25bn to $3.5bn — roughly doubling AI-related revenue year on year. Q1 2026 revenue grew 35.1%.
• EOS is a genuine architectural moat: a single Linux-based software image runs unmodified across the whole portfolio, from 1G campus access switches to 1.6T AI spines, alongside one data lake in NetDL and one management plane in CloudVision. That delivers in-service upgrades, streaming telemetry and no retraining, and it is the reason the 2026 Net Promoter Score came in at 89 with 94% of customers strongly positive.
• The balance sheet is pristine: zero debt of any kind in every year from FY2021 to FY2025, against $12,353.2m of cash and marketable securities at 31 March 2026 and $13,487.1m of shareholders' equity. Enterprise value is therefore below market capitalisation.
• Cash conversion is exceptional: FY2025 operating cash flow of $4,371.9m against capital expenditure of only $119.5m produced $4,252.4m of free cash flow on $9.0bn of revenue, with GAAP operating margin of 42.8% and non-GAAP operating margin of 48.2%. Q1 2026 alone generated $1,693.5m of operating cash flow.
• Deferred revenue has nearly doubled: total deferred revenue rose from $2,791.4m to $5,372.4m during FY2025 and again to $6,198.7m at 31 March 2026, equal to roughly 64% of the entire FY2025 revenue base — a large, contracted forward book.

Bear Case

• Customer concentration is severe and getting worse: the 10-K discloses one end customer at 26% of FY2025 revenue and another at 16%, so 42% of the business sits with two buyers. The larger of the two has risen from 18% in FY2023 to 20% in FY2024 to 26% in FY2025. Two resellers also account for 52% of accounts receivable.
• Nvidia has caught up in Arista's own market: Spectrum-X went from under 4% to roughly 21.5% of the data centre Ethernet switch market in two years, at or above Arista's reported share, because it is bundled with GPUs into an integrated AI-factory package. Nvidia's data centre networking revenue hit a record $14.8bn in its most recent quarter, up 199% year on year.
• Management is guiding gross margin down: non-GAAP gross margin slid from 65.6% in Q2 2025 to 65.2% in Q3 to 63.4% in Q4 2025, and FY2026 guidance of 62–64% sits below the FY2025 actual of 64.6%, explicitly because of customer mix and rising memory and silicon costs.
• The multiple leaves no room: roughly 61x trailing GAAP earnings, 23x trailing sales, 51x EV/EBITDA and 43x trailing free cash flow, against a 52-week range of $114.52 to $189.82 — a 66% peak-to-trough spread inside twelve months.
• Insiders sell relentlessly and never buy: not a single open-market purchase by any insider in 2026. Andy Bechtolsheim has sold 200,000 to 300,000 shares roughly weekly under a plan adopted 20 February 2026, and Jayshree Ullal sold over 1.3m shares across April and July 2026. Against that sits $6.8bn of non-cancellable purchase commitments on a $9.0bn revenue base.

3. Business Segments

Arista reports a single operating segment. It does, however, disclose several revenue splits, and the FY2025 10-K introduced new customer and product category labels replacing the previous groupings.

Segment	% of revenue	What it is
Product — FY2025 revenue $7,576.9m, up 28.8%	84.1%	Ethernet switching and routing hardware. The 7000-series data centre spine and leaf platforms, the 7800R4 and 7700R4 AI platforms, 7060 and 7050 X-series fixed switches, 720 and 750 campus switches, and 7130 low-latency platforms for electronic trading. Software licences for EOS features are embedded in this line
Service and subscription — FY2025 revenue $1,428.8m, up 27.7%	15.9%	Principally Post Contract Support contracts sold alongside product and renewed thereafter, plus CloudVision subscriptions and network security offerings. Arista's own "Cognitive Networks" software and services category is approximately 17% of total FY2025 revenue
Americas — FY2025 revenue $7,122.1m	79.1%	The home market, down from 81.8% of revenue in FY2024 as international mix improved. Europe, Middle East and Africa contributed $1,070.3m or 11.9%, and Asia-Pacific $813.3m or 9.0%. Non-Americas revenue rose from 18.2% to 20.9% of the total during FY2025
Cloud and AI Titans — approximately $4,323m implied	48%	The hyperscale and AI build-out customers. The remaining customer groupings are Enterprise at approximately 32% of revenue and AI and Specialty Providers at approximately 20%. By product category the split is approximately 65% Core covering AI, cloud and data centre networking, 18% Cognitive Adjacencies covering campus and routing, and 17% software and services

Customer concentration is disclosed but not named. The 10-K states that sales to one end customer represented 26%, 20% and 18% of total revenue in FY2025, FY2024 and FY2023 respectively, and sales to another end customer represented 16%, 15% and 21% over the same years. Third-party analysis attributes the larger to Microsoft and the smaller to Meta Platforms; Arista itself does not name either.

4. Business Model and Moat

How it makes money. Roughly 84% of revenue is hardware and 16% is service and subscription, but the split understates the software content: EOS feature licences and CloudVision subscriptions sit inside both lines, and Arista's own software and services category is approximately 17% of revenue. Gross margin has run structurally between 62% and 66%, with FY2025 GAAP gross margin at 64.1% and non-GAAP at 64.6%. Very little capital is required — FY2025 capital expenditure was $119.5m against $4,371.9m of operating cash flow.

The single-image architecture. Arista's structural advantage is EOS, the Extensible Operating System. One modular Linux-based software image runs unmodified across the entire product range. The 10-K frames it as "a single operating system (EOS), a single data lake (NetDL), and a single management solution (CloudVision)... This strategy allows us to address a broad set of needs from client to cloud while maintaining feature consistency across our entire product portfolio." Competitors, Cisco most notably, historically carried multiple operating system code bases. The practical consequences are in-service software upgrades, real-time streaming telemetry, no forklift retraining and a low operational cost of ownership — which is what keeps large accounts from switching.

The merchant silicon trade. Arista buys switching ASICs rather than designing them, and the 10-K is explicit that the company is "primarily reliant upon our predominant merchant silicon vendor, Broadcom, for our switching chips" — Tomahawk for high-radix leaf and spine, Jericho for deep-buffer routing. This is simultaneously a moat and a dependency. Arista rides Broadcom's silicon cadence with a far lower research burden than a vertically integrated competitor and reaches market fast on each new SerDes generation, but Broadcom also sells the same chips into white-box vendors that undercut Arista, and there is no written supply guarantee.

Deferred revenue as both moat and risk. Total deferred revenue rose 92.5% during FY2025 to $5,372.4m and reached $6,198.7m at 31 March 2026, contributing $2,452.0m of FY2025 operating cash flow and $826.2m of Q1 2026 operating cash flow. Part is multi-year support, which is a genuine annuity. Part is product revenue deferred pending customer acceptance on new AI platforms, and the 10-K explicitly flags increased volatility and magnitude of product deferred revenue balances as a source of revenue variability. It is a forward book and a timing risk in the same number.

For live price action on ANET and its peer group, see the ChartsView Live Charts page.

5. Financial Health

All figures below are taken from Arista Networks quarterly earnings releases filed as exhibits to Form 8-K, the FY2025 Form 10-K filed on 17 February 2026, and SEC XBRL company facts for CIK 0001596532. All per-share figures are on a four-for-one split-adjusted basis.

Fiscal Year	Revenue ($m)	YoY %	GAAP EPS	Adjusted EPS	Dividend/share	Long-term debt (YE)
FY2021	$2,948.0m	+27.2%	$0.66†	$0.72†	Nil	Nil
FY2022	$4,381.3m	+48.6%	$1.07	$1.15†	Nil	Nil
FY2023	$5,860.2m	+33.8%	$1.65	$1.73	Nil	Nil
FY2024	$7,003.1m	+19.5%	$2.23	$2.27‡	Nil	Nil
FY2025	$9,005.7m	+28.6%	$2.75	$2.98	Nil	Nil

† Arista never published split-adjusted per-share figures for FY2021 or FY2022 non-GAAP, so these are derived by dividing the as-reported pre-split amounts by four. FY2023 onward are company-published split-adjusted figures.

‡ Effective Q4 2025 Arista changed how it calculates the income tax effect of non-GAAP adjustments and recast prior periods. On the recast basis FY2024 non-GAAP EPS becomes $2.32 rather than the $2.27 originally reported.

On long-term debt: Arista is completely debt-free and has been throughout the period. The FY2025 consolidated balance sheet carries accounts payable of $651.7m, accrued liabilities of $475.4m, current deferred revenue of $4,002.6m, other current liabilities of $246.8m, non-current deferred revenue of $1,369.8m and other long-term liabilities of $331.8m — total liabilities of $7,078.1m with no debt line item of any kind. SEC XBRL returns no data at all for long-term debt, current debt or short-term borrowing tags in any year, because the company has never had any to tag. The only debt-like obligations are operating lease liabilities, tagged at $22.1m current and $37.5m non-current in the FY2024 filing.

Supporting detail: GAAP net income rose from $840.9m in FY2021 to $3,511.4m in FY2025. Diluted weighted-average shares were broadly flat across the period at 1,276.9m in FY2021 and 1,275.7m in FY2025, so growth has been almost entirely organic rather than diluted away.

Quarter / Half	Revenue	Adjusted EPS	GAAP EPS
Q1 2026 (to 31 Mar 2026, reported 5 May 2026)	$2,709.0m, +35.1%	$0.87	$0.80
Q4 2025 (to 31 Dec 2025, reported 12 Feb 2026)	$2,487.8m, +28.9%	$0.82	$0.75
Q3 2025 (to 30 Sep 2025, reported 4 Nov 2025)	$2,308.3m, +27.5%	$0.75	$0.67
Q2 2025 (to 30 Jun 2025, reported 5 Aug 2025)	$2,204.8m	$0.73	$0.70
FY2025 total	$9,005.7m, +28.6%	$2.98	$2.75

Q2 2026 results, covering the quarter ended 30 June 2026, are scheduled for release after the US market close on 4 August 2026 and are therefore not included above. Management guided that quarter on 5 May 2026 to approximately $2.8bn of revenue, a non-GAAP operating margin of 46–47% and non-GAAP diluted EPS of approximately $0.88.

Cash generation, FY2025: operating cash flow of $4,371.9m against $3,708.2m in FY2024; purchases of property, equipment and intangible assets of $119.5m against $32.0m; depreciation and amortisation of $72.6m; stock-based compensation of $439.2m. GAAP operating income was $3,856.1m at a 42.8% margin and non-GAAP operating income $4,337.0m at a 48.2% margin. Share repurchases totalled $1,603.1m, and $300.0m of cash went to the VeloCloud acquisition. Q1 2026 produced $1,693.5m of operating cash flow with $54.5m of capital expenditure and no buybacks at all.

Balance sheet at 31 March 2026: cash and cash equivalents of $2,789.5m plus marketable securities of $9,563.7m for total liquid assets of $12,353.2m, against zero debt. Total assets $21,656.5m, total liabilities $8,169.4m, shareholders' equity $13,487.1m, inventories $2,380.0m and accounts receivable $1,923.8m. Arista classifies its entire securities portfolio as current, so there is no separate long-term investments line to double-count. Off balance sheet, non-cancellable purchase commitments stood at $6.8bn at 31 December 2025, of which $6.3bn have confirmed receipt dates within twelve months.

6. Valuation Metrics

Raw metrics, August 2026. Not opinions on whether the stock is cheap or expensive.

Metric	Value
Market cap	Approximately $227.1bn at the close of 31 July 2026, on 1,259.17m split-adjusted shares at $180.35
Enterprise value	Approximately $214.7bn (market cap $227.1bn + total debt $0m − cash and marketable securities $12,353.2m per the 31 March 2026 balance sheet). Arista is net cash, so enterprise value sits below market capitalisation
Trailing P/E (GAAP)	Approximately 61x on trailing twelve month GAAP net income of $3,720.5m ($0.70 + $0.67 + $0.75 + $0.80 = $2.92 of trailing EPS). A third-party screen shows 62.2x on its own trailing basis
P/E (forward)	Approximately 40x. Arista does not guide to a full-year EPS figure, so this is a third-party consensus-based calculation rather than a company-guided number; the FY2026 revenue guide of approximately $11.5bn and a 46–47% non-GAAP operating margin are the disclosed inputs
P/S (TTM)	Approximately 23.4x on trailing twelve month revenue of $9,709.9m ($2,204.8m + $2,308.3m + $2,487.8m + $2,709.0m). On FY2025 revenue of $9,005.7m the multiple is approximately 25.2x
EV/EBITDA (TTM)	Approximately 51x (EV approximately $214.7bn / EBITDA approximately $4.24bn; EBITDA = trailing twelve month GAAP operating income of $4,155.1m + trailing D&A of $82.1m). On FY2025 alone, operating income $3,856.1m + D&A $72.6m = $3,928.7m gives approximately 55x. Note this is GAAP and therefore after $439.2m of FY2025 stock-based compensation
P/FCF	Approximately 43x (market cap approximately $227.1bn / trailing twelve month free cash flow approximately $5.28bn; FCF = trailing operating cash flow $5,423.7m − trailing capital expenditure $145.6m). On FY2025 alone, $4,371.9m − $119.5m = $4,252.4m gives approximately 53x
52-week high	$189.82, set on 9 July 2026. The all-time closing high was $186.96 on 10 July 2026
52-week low	$114.52, set on 21 November 2025
Short interest (% of float)	Approximately 2.0% of float, 21.3m shares, per the July 2026 settlement period
Days to cover	Approximately 2.1 days
Price/book	Approximately 16.8x on shareholders' equity of $13,487.1m at 31 March 2026
Dividend yield	Nil. Arista has never paid a dividend

7. What Are They Building

Research and development spending reached $1,237.3m in FY2025, up from $996.7m in FY2024, though as a share of revenue it has fallen steadily from 19.9% in FY2021 to 13.7% in FY2025 as the top line outgrew the engineering base. Q1 2026 R&D was $343.7m, up 29.0% year on year and equal to 12.7% of revenue.

The 1.6T generation. On 9 June 2026 Arista launched the 7060XE7 Series, extending the Etherlink AI portfolio from 800G to 1.6T for rack-scale AI. The line spans air-cooled 4RU configurations with 64 ports of 1.6T and a liquid-cooled 2OU variant using 224G SerDes and open rack DC power, delivering 100 Tbps of aggregate throughput. Linear pluggable optics support cuts interconnect power by roughly 60%. First systems are available in Q4 2026 with additional models in Q1 2027, and Meta, Microsoft and Oracle are named as validated deployments.

Optics density. On 12 March 2026 Arista announced a multi-source agreement for XPO, a 12.8 Tbps liquid-cooled optics module supporting 204.8 Tbps of front-panel density per open compute rack unit — a fourfold improvement on 1600G-OSFP optics that cuts networking racks by up to 75% and floor space by up to 44%.

The AI fabric architecture. Etherlink spans the 7700R4 Distributed Etherlink Switch, the 7800R4 modular AI spine and the 7060X and 7060XE fixed platforms. The technical differentiators are virtual output queuing to eliminate head-of-line blocking, deep buffers to absorb AI microbursts without triggering priority flow control storms, and cluster load balancing. Arista is a founding participant in the Ultra Ethernet Consortium and in ESUN, the Ethernet for Scale-Up Networks workstream unveiled at the OCP Global Summit in October 2025. Management has indicated scale-up is a 2027 revenue opportunity rather than a 2026 one.

Software and autonomous operations. CloudVision Universal Network Observability adds AI-workload-centric job telemetry, and Arista AVA, the Autonomous Virtual Assist, gained agentic capabilities in Q4 2025 for multi-domain event correlation, continuous monitoring and troubleshooting. Arista has also announced AI agents built on open standards such as MCP running over EOS and NetDL.

Campus and the VeloCloud acquisition. Arista completed the purchase of the VeloCloud SD-WAN business from Broadcom on 30 June 2025 for $300.0m in cash, allocated as $268.4m of intangibles, $148.0m of goodwill and $116.4m of net tangible liabilities assumed. On 21 July 2026 it launched AI-driven Edge Threat Management for VeloCloud, collapsing multiple branch boxes into a single secure SD-WAN edge platform. The FY2026 campus revenue goal has been reiterated at $1.25bn, and on 20 May 2026 Arista was named a Leader in the 2026 Gartner Magic Quadrant for Enterprise Wired and Wireless LAN, an upgrade from the Visionaries quadrant in the 2025 edition.

8. Competitive Landscape

Market capitalisations below were re-checked live on 2 August 2026, which matters in this sector — cached figures from earlier in the year are badly stale given the pace of the AI re-rating. Note that Juniper Networks no longer trades independently following its acquisition by HPE.

Peer	Market cap (August 2026)	Key 2025/2026 metric
NVIDIA Corporation (NASDAQ: NVDA)	Approximately $4.86tn at $200.75	Data centre networking revenue of a record $14.8bn in the most recent quarter, up 199% year on year and 35% sequentially — an annualised run rate near $60bn. Spectrum-X reached approximately 21.5% of the data centre Ethernet switch market in Q1 2026, up from under 4% two years earlier
Broadcom Inc. (NASDAQ: AVGO)	Approximately $1.85tn at $389.28	Arista's predominant merchant silicon supplier and simultaneously a competitor via Tomahawk 6 sold into white-box vendors. Guided AI revenue to roughly double year on year to $8.2bn in Q1 FY2026, with a stated line of sight to more than $100bn of AI chip revenue in FY2027
Cisco Systems, Inc. (NASDAQ: CSCO)	Approximately $457.2bn at $115.99	Raised FY2026 revenue guidance to $62.8–63.0bn and expects approximately $9bn of AI infrastructure orders from hyperscalers in FY2026. Q3 FY2026 revenue was a record $15.8bn with networking product revenue up 25%
Hewlett Packard Enterprise (NYSE: HPE)	Approximately $63.4bn at $47.90	HPE Networking, which now includes the acquired Juniper business, generated $2.7bn of revenue in Q1 FY2026, up 151.5% year on year at a 23.7% operating margin. Launched the HPE Juniper QFX5250 on Broadcom Tomahawk 6
Ciena Corporation (NYSE: CIEN)	Approximately $53.4bn at $377.05	Trailing P/E of 124.9x and forward P/E of 39.1x, with a 52-week range of $84.41 to $637.51 — an illustration of how violently AI-optics valuations have moved in both directions
Celestica Inc. (NYSE: CLS)	Approximately $38.1bn at $331.44	The white-box and original design manufacturer proxy, on a trailing P/E of 36.4x and forward P/E of 16.7x, with a 52-week range of $173.23 to $474.03

9. Insider Activity

Chairperson, President and Chief Executive Officer Jayshree Ullal has been a consistent seller through 2026, as have co-founder and Chief Architect Andy Bechtolsheim and President and Chief Technology Officer Kenneth Duda. There have been no open-market insider purchases of Arista stock in 2026 — every open-market transaction on record is a sale. Every large sale below was executed under a Rule 10b5-1 plan according to the Form 4 footnotes.

Name	Date	Type	Shares	Price	Value	Plan Type
Kenneth Duda, President and CTO	20 Jul 2026	Option exercise and sale	43,333 sold	$170.51 weighted average	$7,388,872	Rule 10b5-1
Andy Bechtolsheim, Chief Architect	14 Jul 2026	Sale	300,000	$180.77 weighted average	$54,231,399	Rule 10b5-1, plan adopted 20 Feb 2026
Jayshree Ullal, Chairperson and CEO	10 Jul 2026	Sale	234,578	$187.18 weighted average	$43,907,278	Rule 10b5-1, plan entered 14 Nov 2025
Jayshree Ullal, Chairperson and CEO	9 Jul 2026	Sale	242,422	$188.17	$45,616,220	Rule 10b5-1
Andy Bechtolsheim, Chief Architect	2 Jul 2026	Sale	240,000	$162.67	$39,040,876	Rule 10b5-1
Charles H. Giancarlo, Director	1 Jul 2026	Sale	8,000	$167.06	$1,336,474	Recurring monthly pattern, also 1 Jun 2026 and 1 May 2026
Jayshree Ullal, Chairperson and CEO	22 Apr 2026	Sale	428,000	$177.44	$75,944,314	Rule 10b5-1
Chantelle Breithaupt, SVP and CFO	26 May 2026	Sale	2,448	$157.00	$384,336	Rule 10b5-1

Context matters on the size of these sales. Post-sale holdings remain very large: Bechtolsheim held 181,854,896 shares, roughly 14.4% of the company, after his 14 July disposal, and Ullal held 27,493,341 shares after 10 July, with a substantial portion of her sold shares held in family trusts for which she disclaims beneficial ownership. The pattern is programmatic rather than discretionary. Separately, the company repurchased $1,603.1m of stock during FY2025 but made no repurchases at all in Q1 2026, leaving approximately $817.9m of authorisation outstanding at 31 December 2025.

10. Key Risks

• Customer concentration: 42% of FY2025 revenue came from two end customers, at 26% and 16%. The larger has climbed from 18% in FY2023 to 26% in FY2025, so the dependency is deepening rather than diversifying. The 10-K cites unpredictability in the timing of orders from high-volume customers, including reductions or shifts in their capital expenditure budgets. Two resellers also represent 52% of accounts receivable.
• Nvidia competition in the core market: Spectrum-X moved from under 4% to roughly 21.5% of data centre Ethernet switching in two years, matching or exceeding Arista's own share, because it ships bundled with GPUs as an integrated AI-factory package. Nvidia also owns NVLink for scale-up interconnect, a domain Arista has said it will not address until 2027.
• AI capex cyclicality, flagged by Arista itself: the 10-K states that markets for its products, "particularly the AI Ethernet segment, are characterized by rapid evolution and volatility" and may experience "prolonged slowdowns, cyclical contractions, or the correction of speculative bubbles." It adds that customers "may overestimate demand for their AI build outs and cancel, delay, reduce or otherwise modify their purchase commitments with little or no notice to us."
• Gross margin compression: non-GAAP gross margin fell from 65.6% in Q2 2025 to 63.4% in Q4 2025, and FY2026 guidance of 62–64% sits below the FY2025 actual, explicitly inclusive of mix and anticipated supply chain cost increases for memory and silicon. Large customers also receive more favourable terms including pricing discounts, bundled upgrades and extended warranties.
• Supply chain and off-balance-sheet purchase commitments: $6.8bn of non-cancellable, non-returnable purchase commitments sit off balance sheet against a $9.0bn revenue base, with $6.3bn due within twelve months, alongside $2.25bn of inventory. Management has said supply constraints are expected to persist one to two years rather than a few quarters across wafers, silicon, CPUs, optics and memory. If demand forecasts prove wrong, the write-down exposure is substantial.
• Sole-source silicon dependency: the 10-K states Arista is "primarily reliant upon our predominant merchant silicon vendor, Broadcom, for our switching chips" and that neither Arista nor its contract manufacturers hold a written agreement guaranteeing supply of key components. Broadcom simultaneously sells the same silicon into white-box vendors that compete with Arista on price.
• Tariffs and export controls: the risk factors lead with escalating US tariffs, countermeasures and retaliatory actions, plus enhanced export restrictions targeting trade with China. Manufacturing sits with Jabil, Sanmina and Foxconn Hon Hai across Malaysia, Vietnam, Mexico and other countries.
• Key-person and governance concentration: Jayshree Ullal holds the Chief Executive, President and Chairperson roles simultaneously, with no independent chair. Andy Bechtolsheim retains roughly 14.4% of the company. The 10-K notes that employment arrangements do not generally require employees to stay for any specified period.
• Revenue timing volatility from deferred revenue: the 10-K warns that an increase in customer trials and contracts with acceptance provisions, and greater volatility in product deferred revenue balances, "have created variability in our revenue," and that delays in acceptance, rejection or return could further affect reported revenue.
• Valuation and multiple compression: at roughly 61x trailing GAAP earnings, 23x trailing sales, 51x EV/EBITDA and 43x trailing free cash flow, against guided revenue growth of 27.7% and a declining gross margin, any deceleration signal from the two largest customers has an outsized effect on the multiple. The 52-week range of $114.52 to $189.82 shows how quickly that has happened before.

11. Recent Developments

• 4 Nov 2025 — Q3 2025 results. Revenue of $2,308.3m up 27.5% year on year, GAAP EPS of $0.67 and non-GAAP EPS of $0.75, with non-GAAP gross margin of 65.2%.
• 21 Nov 2025 — 52-week low. Shares set what remains the 52-week low of $114.52, roughly 40% below the July 2026 high.
• 12 Feb 2026 — Q4 and FY2025 results. Q4 revenue of $2,487.8m up 28.9%, with GAAP net income of $955.8m and non-GAAP net income of $1,046.6m — the first quarter ever above $1bn. Full-year revenue of $9,005.7m up 28.6% and non-GAAP EPS of $2.98. Q1 2026 guidance issued at approximately $2.6bn of revenue. Ullal noted the milestone of shipping a cumulative 150 million ports.
• 17 Feb 2026 — FY2025 Form 10-K filed. Disclosed 5,115 employees, $6.8bn of purchase commitments, the 26% and 16% customer concentration figures, and the new Cloud and AI Titans, Enterprise, and AI and Specialty Providers segmentation replacing the previous labels.
• 12 Mar 2026 — XPO optics multi-source agreement announced. A 12.8 Tbps liquid-cooled optics module supporting 204.8 Tbps of front-panel density per open compute rack unit, cutting networking racks by up to 75% and floor space by up to 44%.
• 5 May 2026 — Q1 2026 results and a guidance raise. Revenue of $2,709.0m up 35.1%, GAAP EPS $0.80, non-GAAP EPS $0.87 and operating cash flow of $1.69bn, with a 2026 Net Promoter Score of 89. FY2026 revenue guidance raised to approximately $11.5bn implying 27.7% growth, and the FY2026 AI fabrics target raised from $3.25bn to $3.5bn.
• 20 May 2026 — Gartner upgrade. Named a Leader in the 2026 Gartner Magic Quadrant for Enterprise Wired and Wireless LAN, up from the Visionaries quadrant in the 2025 edition — relevant to the $1.25bn campus revenue goal.
• 29 May 2026 — Annual Meeting of Stockholders. Shareholders elected Class III directors Lewis Chew, Greg Lavender and Mark B. Templeton to serve until the 2029 meeting, and ratified say-on-pay and the auditor.
• 9 Jun 2026 — 7060XE7 1.6T launch. Extended the Etherlink portfolio from 800G to 1.6T across air-cooled, liquid-cooled and high-density variants, with linear pluggable optics cutting interconnect power by roughly 60%. First systems available Q4 2026, with Meta, Microsoft and Oracle confirmed as validated deployments.
• 7 Jul 2026 — Q2 2026 earnings date confirmed. Announced that results for the quarter ended 30 June 2026 would be released after the US market close on Tuesday 4 August 2026, with the call at 4:30pm Eastern.
• 9 Jul 2026 — 52-week high. Shares reached $189.82 intraday, with an all-time closing high of $186.96 the following day, after commentary that AI demand was accelerating as the 1.6T platform entered commercial deployment.
• 21 Jul 2026 — Edge Threat Management launched. AI-driven zero-trust security for VeloCloud SD-WAN, collapsing multiple branch office boxes into a single secure edge platform — the first significant product output of the VeloCloud acquisition.

12. Key Dates to Watch

• 4 Aug 2026 — Q2 2026 results, released after the US market close with a conference call at 4:30pm Eastern. Management guided to approximately $2.8bn of revenue, a 46–47% non-GAAP operating margin and non-GAAP EPS of approximately $0.88
• 18 Aug 2026 — Rosenblatt Age of AI Technology Summit, per Arista's investor relations events listing
• 8 Sep 2026 — Goldman Sachs Communacopia and Technology Conference
• Expected Nov 2026 — Q3 2026 results. No date has been announced as of 2 August 2026; Arista's pattern is to confirm roughly three weeks in advance, so expect a scheduling release in early October 2026. Q3 2025 was reported on 4 November 2025
• Expected Q4 2026 — first systems of the 7060XE7 1.6T series become available, with additional models expected in Q1 2027
• Expected Feb 2027 — Q4 and FY2026 results, together with initial FY2027 guidance. FY2025 was reported on 12 February 2026
• Expected May 2027 — next Annual Meeting of Stockholders. The 2026 meeting was held on 29 May 2026

No dedicated investor or analyst day has been announced for 2026; Arista presents at third-party conferences instead. Management has indicated that scale-up Ethernet networking is a 2027 revenue opportunity rather than a 2026 one, so commentary on that timeline is worth watching on each earnings call. To track scheduled macro releases alongside company events, see the ChartsView Economic Calendar, and to discuss this report with other members visit the ChartsView Forum.

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Disclaimer: This research is produced by ChartsView for educational and informational purposes only. It does not constitute financial advice or a recommendation to buy or sell any security. All information is sourced from publicly available company filings, press releases, and official data. ChartsView does not use analyst opinions or third-party ratings. Always conduct your own due diligence and consider your personal financial situation before making investment decisions. Past performance is not indicative of future results.

Last Updated: 14 July 2026

ON Semiconductor Corporation (onsemi) is a US power and sensing semiconductor company headquartered in Scottsdale, Arizona. Its chips manage electrical power and sense the physical world in cars, factories and — increasingly — AI data centres. The company is emerging from a bruising three-year downcycle: revenue has fallen from a 2022 peak of $8.33bn to $6.00bn in 2025, but Q1 2026 marked what management calls the turn, with demand strengthening through the quarter and the AI data-centre business growing more than 30% sequentially. On 25 June 2026 onsemi announced its largest-ever acquisition — a $7bn all-stock deal for Synaptics — and the market's verdict was brutal: the shares fell roughly 21% in the days that followed. This report sets out the facts.

1. Company Snapshot

Field	Value
Company	ON Semiconductor Corporation (onsemi)
Ticker / Exchange	ON / Nasdaq
Headquarters	Scottsdale, Arizona, USA
Founded	1999 (spun out of Motorola's Semiconductor Components Group)
CEO	Hassane El-Khoury (President and CEO since December 2020)
Employees	~19,537 (31 December 2025, FY2025 10-K)
Sector	Semiconductors — intelligent power and sensing
Revenue (FY2025)	$5,995.4m (down 15.3% year-over-year)
Net income (FY2025, GAAP)	$121.0m (non-GAAP $966.4m)
Market cap	~$37.4bn (July 2026)
Dividend	Nil — capital returned via share repurchases

2. Bull vs Bear Case

Bull Case

• AI data centre is inflecting: onsemi's power-management content in AI server racks drove data-centre revenue up more than 30% sequentially in Q1 2026, and management says the company has moved beyond the cyclical trough with demand strengthening through the quarter.
• The trough is behind it: Q1 2026 revenue of $1,513.3m beat the guidance midpoint, gross margin expanded to 38.5% on manufacturing efficiency, and Q2 2026 guidance of $1,535–1,635m implies a return to sequential and year-over-year growth.
• Synaptics expands the opportunity: the $7bn all-stock acquisition adds edge-AI compute, human-machine interface and wireless connectivity, extending onsemi beyond power and sensing into intelligent systems and expanding its addressable market by $30bn to $243bn by 2030, with $200m of annual synergies targeted within 18 months of close.
• Free-cash-flow machine: FY2025 free cash flow was a record-margin $1,418.6m (24% of revenue) despite the downturn, and the company returned 100% of it to shareholders through buybacks — treasury stock has grown to $6.1bn at cost.

Bear Case

• Three straight years of decline: revenue has fallen from $8,326.2m (2022) to $5,995.4m (2025) — a 28% peak-to-trough contraction — as automotive and industrial customers burned inventory and EV demand disappointed.
• The market hated the Synaptics deal: the all-stock structure dilutes existing holders at a depressed share price, the stock fell about 21% in the days after the 25 June announcement, and law firm Pomerantz opened an investor investigation into the transaction.
• GAAP profitability collapsed: FY2025 GAAP EPS was just $0.29 versus $2.35 non-GAAP, the gap driven by $666.9m of restructuring and impairment charges plus $313.6m of restructuring-related inventory charges as the company cut ~2,400 jobs and rationalised fabs.
• Heavily shorted and cyclical: short interest is roughly 15% of the float — far above the peer average — reflecting scepticism about the pace of the automotive/industrial recovery and competitive pressure in silicon carbide from Chinese entrants.

3. Revenue Segments

onsemi reports three segments. Figures below are FY2025 (year ended 31 December 2025) from the Q4 2025 earnings release.

Segment	% of revenue	What it is
PSG — Power Solutions Group	46.8% ($2,805.1m)	Power discretes, MOSFETs, IGBTs and silicon carbide (SiC) devices that convert and manage electrical power in vehicles, industrial equipment, energy infrastructure and AI data centres.
AMG — Analog & Mixed-Signal Group	37.7% ($2,261.9m)	Analog and mixed-signal ICs, power management and connectivity products spanning automotive, industrial and cloud/data-centre applications.
ISG — Intelligent Sensing Group	15.5% ($928.4m)	Image sensors and depth/inertial sensing for machine vision, ADAS (advanced driver-assistance) cameras and industrial automation.

4. Business Model

How the money is made: onsemi designs and manufactures semiconductors that sit between a power source and a load — converting, switching and conditioning electricity — plus image sensors that let machines see. Roughly half of revenue comes from automotive (EV traction inverters, on-board chargers, ADAS sensing), with the balance from industrial, energy infrastructure and a fast-growing AI data-centre power business. Chips are sold directly to OEMs and through distributors, with long qualification cycles that make design wins sticky for the life of a vehicle platform or server generation.

Unit economics: the company runs a hybrid "fab-liter" manufacturing model — it owns front-end fabs (including the East Fishkill, NY fab acquired from GlobalFoundries and SiC capacity in the Czech Republic, Korea and the US) but has been consolidating sites to lift utilisation. Gross margin peaked above 47% in 2022–23, troughed at 33.1% GAAP in FY2025 during the downturn, and recovered to 38.5% by Q1 2026. Fall-through on incremental volume is high once fixed fab costs are covered.

Moat: scale in power semiconductors (top-two globally in power discretes), a vertically integrated silicon-carbide supply chain from boule growth to modules, and deep automotive qualification barriers. The pending Synaptics acquisition would add edge-AI compute and connectivity IP, moving onsemi up the value stack from components toward intelligent sub-systems.

Capital allocation: no dividend; 100% of FY2025 free cash flow went to share repurchases ($1.4bn). The Synaptics deal is deliberately all-stock, preserving the balance sheet ($2.5bn cash and short-term investments against $3.0bn long-term debt at year-end 2025).

5. Financial Health

All figures from company earnings releases and SEC EDGAR XBRL filings (10-K). onsemi's fiscal year ends 31 December.

Fiscal Year	Revenue ($m)	YoY %	GAAP EPS	Adjusted EPS	Dividend/share	Long-term debt (YE, $m)
2021	$6,739.8m	+28.3%	$2.27	$2.95	Nil	$2,913.9m
2022	$8,326.2m	+23.5%	$4.25	$5.33	Nil	$3,045.7m
2023	$8,253.0m	-0.9%	$4.89	$5.16	Nil	$2,542.6m
2024	$7,082.3m	-14.2%	$3.63	$3.98	Nil	$3,345.9m
2025	$5,995.4m	-15.3%	$0.29	$2.35	Nil	$2,980.5m

FY2025 GAAP EPS of $0.29 is depressed by $666.9m of restructuring/asset-impairment charges and $313.6m of restructuring-related inventory charges; non-GAAP EPS was $2.35. FY2025 operating cash flow was $1,759.8m, capital expenditure $341.2m, free cash flow $1,418.6m and depreciation & amortisation $686.0m (all per the FY2025 cash flow statement).

Quarter / Half	Revenue ($m)	Adjusted EPS	GAAP EPS
Q1 2026 (ended 3 Apr 2026)	$1,513.3m	$0.64	$0.08
Q4 2025	$1,530.1m	$0.64	$0.45
Q3 2025	$1,550.9m	$0.63	$0.63
Q2 2025	$1,468.7m	$0.53	$0.41
Q1 2025	$1,445.7m	$0.55	$(1.15)
FY 2025 total	$5,995.4m	$2.35	$0.29

Q1 2025's GAAP loss reflects the bulk of the 2025 restructuring and impairment programme. Q1 2026 GAAP EPS of $0.08 versus $0.64 non-GAAP includes further restructuring charges ($58.8m booked in Q4 2025 alone as the programme wound down) and deal-related items. Q1 2026 operating cash flow was $239.1m, capex $21.9m and free cash flow $217.2m, with $345.7m of buybacks in the quarter.

6. Valuation Metrics

Raw metrics, July 2026. Not opinions on whether the stock is cheap or expensive.

Metric	Value
Market cap	~$37.4bn (share price ~$96, 13 July 2026)
Trailing P/E (GAAP)	~61x — trailing-twelve-month GAAP EPS of ~$1.57 (Q2 2025 to Q1 2026) is heavily distorted by restructuring and impairment charges; on FY2025 non-GAAP EPS of $2.35 the multiple is ~41x
P/E (forward)	n/a — company guides one quarter ahead only (Q2 2026 non-GAAP EPS guidance $0.65–$0.77, which annualises to roughly $2.80–$3.10)
P/S (TTM)	~6.2x (market cap ~$37.4bn / trailing-twelve-month revenue ~$6.06bn)
Enterprise value	~$37.8bn (market cap ~$37.4bn + long-term debt $2,980.5m − cash and short-term investments $2,547.6m per 31 Dec 2025 balance sheet)
EV/EBITDA (TTM)	~21x on an adjusted basis (EV ~$37.8bn / adjusted EBITDA ~$1.81bn = FY2025 non-GAAP operating income $1,119.5m + D&A $686.0m); GAAP EBITDA of ~$0.77bn (operating income $84.2m + D&A $686.0m) is distorted by ~$981m of one-off restructuring/impairment charges and implies ~49x
P/FCF	~26x (market cap ~$37.4bn / FY2025 free cash flow $1,418.6m; FCF = operating cash flow $1,759.8m − capex $341.2m per FY2025 cash flow statement)
52-week high	$134.92 (3 June 2026)
52-week low	$44.56 (21 November 2025)
Short interest (% of float)	~15.3% (MarketBeat, latest reported period)
Days to cover	~4.4 (on ~9.0m average daily volume)

7. What Are They Building

Three build-outs matter. First, AI data-centre power: onsemi is scaling its power-stage and power-management portfolio for AI server racks, where per-rack power density is rising sharply; this business grew more than 30% sequentially in Q1 2026 and is the company's fastest-growing end market. Second, vertical GaN and the Treo analog/mixed-signal platform: a new 65nm-class analog platform and vertical gallium-nitride devices aimed at higher-voltage, higher-efficiency power conversion — the next technology legs beyond silicon and silicon carbide. Third, and largest, the Synaptics acquisition (announced 25 June 2026): an all-stock deal at a fixed 1.350 exchange ratio valuing Synaptics at roughly $7bn enterprise value. Synaptics brings edge-AI compute, human-machine interface and wireless connectivity (Wi-Fi/Bluetooth for IoT). Management frames the combination as "physical AI" — pairing onsemi's power and sensing with Synaptics' compute and connectivity to sell intelligent sub-systems rather than discrete parts. The combined company would have had roughly $7.8bn of 2026 revenue; $200m of annual synergies are targeted within 18 months of close, expected mid-2027 subject to Synaptics shareholder and regulatory approvals. You can track the chart on our Live Charts page.

8. Competitive Landscape

onsemi competes in power semiconductors and image sensing against larger European and US analog/power houses. Market caps as retrieved July 2026.

Peer	Market cap (Jul 2026)	Key 2025 metric
Infineon Technologies (IFX)	~$108.3bn	FY2025 (ended 30 Sep 2025) revenue ~€14.7bn — the European power-semiconductor leader
Texas Instruments (TXN)	~$275.9bn (24 Jun 2026)	2025 revenue grew ~13% (quarterly run-rate $4.1–4.7bn) — dominant analog scale player
NXP Semiconductors (NXPI)	~$75.3bn (Jun 2026)	FY2025 revenue $12.27bn, down 3% — closest US automotive-semi comparable
STMicroelectronics (STM)	~$64.1bn (9 Jul 2026)	FY2025 net revenues $11.8bn, down 11.1% on automotive weakness — chief SiC rival

Within silicon carbide, onsemi's vertically integrated supply chain competes with STMicroelectronics and Infineon at the top end, while Chinese entrants pressure pricing at the commodity end. In image sensing, Sony dominates consumer, but onsemi leads automotive ADAS cameras.

9. Leadership & Insider Activity

Hassane El-Khoury has been President and CEO since December 2020, having led the pivot to intelligent power and sensing; Thad Trent is EVP and CFO. The FY2025 restructuring cut roughly 2,400 jobs, and the leadership team is now integrating the Synaptics transaction announced in June 2026.

Name	Date	Type	Shares	Price	Value	Plan Type
Hassane El-Khoury (President & CEO)	12 Feb 2026	Sale (open market)	20,000	~$73.02–$73.56	~$1.46m	Not stated (Form 4)
Hassane El-Khoury (President & CEO)	10 Feb 2026	Shares withheld for tax on PSU vesting	20,762	$67.38	~$1.40m	Tax withholding
Hassane El-Khoury (President & CEO)	5 Feb 2026	PSU vesting (acquisition)	112,772	—	—	Equity award

Beyond routine February 2026 equity-award vesting and the CEO's ~$1.5m open-market sale, searches found no material insider buying in 2026. No director or officer purchases were identified following the Synaptics announcement.

10. Risks

• M&A execution (Operational): the all-stock Synaptics acquisition dilutes holders at a depressed price, integration spans very different product cultures (consumer connectivity vs automotive power), and an investor investigation by Pomerantz LLP followed the announcement. Deal close is not expected until mid-2027, an unusually long window.
• Cyclical demand (Macro): revenue has declined for three consecutive years; the recovery visible in Q1 2026 could stall if automotive production or industrial capex weakens again.
• Automotive concentration (Operational): roughly half of revenue is automotive; EV build-rate swings and OEM inventory corrections hit onsemi harder than diversified analog peers.
• Silicon-carbide competition (Competitive): STMicroelectronics and Infineon contest the high end while subsidised Chinese capacity pressures SiC pricing; onsemi's SiC investments could earn sub-par returns if pricing erodes.
• Restructuring overhang (Financial): $981m of restructuring/impairment charges in FY2025 (including inventory charges) shows how quickly fixed-cost leverage cuts both ways; further site consolidation could bring more charges.
• Trade and export controls (Regulatory): a global fab and test footprint across the US, Czech Republic, Korea, Philippines and China exposes the company to tariffs and export-control shifts.

11. Recent Developments

• 25 Jun 2026 — $7bn all-stock Synaptics acquisition announced. Fixed exchange ratio of 1.350 onsemi shares per Synaptics share, a ~19% premium on 10-day VWAPs; expands addressable market by $30bn to $243bn by 2030 with $200m annual synergies targeted within 18 months of close (expected mid-2027). onsemi shares fell ~6% after hours and roughly 21% over the following days; Pomerantz LLP opened an investor investigation into the deal.
• 3 Jun 2026 — Shares touched a 52-week high of $134.92 amid enthusiasm for the AI data-centre power business, before the Synaptics announcement reset the price to the mid-$90s.
• 4 May 2026 — Q1 2026 results beat guidance midpoint. Revenue $1,513.3m, non-GAAP EPS $0.64 (vs $0.55 a year earlier), GAAP EPS $0.08, gross margin 38.5%; AI data-centre revenue up more than 30% sequentially; free cash flow $217.2m with $345.7m of buybacks. Q2 2026 guidance: revenue $1,535–1,635m, non-GAAP EPS $0.65–$0.77.
• 9 Feb 2026 — FY2025 results: trough year confirmed. Revenue $5,995.4m (−15.3%), GAAP EPS $0.29, non-GAAP EPS $2.35, record 24% free-cash-flow margin ($1.4bn), 100% of FCF returned via buybacks.

12. Key Dates

Check our Economic Calendar for macro events that move semiconductor stocks, and discuss this name on the ChartsView Forum.

• 3 Aug 2026 — Q2 2026 results (expected date; guidance is revenue $1,535–1,635m and non-GAAP EPS $0.65–$0.77)
• Expected Nov 2026 — Q3 2026 results
• TBC — Synaptics shareholder vote on the all-stock merger
• Expected mid-2027 — Targeted close of the Synaptics acquisition, subject to regulatory approvals

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Disclaimer: This research is produced by ChartsView for educational and informational purposes only. It does not constitute financial advice or a recommendation to buy or sell any security. All information is sourced from publicly available company filings, press releases, and official data. ChartsView does not use analyst opinions or third-party ratings. Always conduct your own due diligence and consider your personal financial situation before making investment decisions. Past performance is not indicative of future results.

Last Updated: 14 July 2026

Oracle Corporation is one of the world's largest enterprise software and cloud infrastructure companies, and right now it is the market's most dramatic AI story. Fiscal 2026 (ended 31 May 2026) delivered record revenue of $67.4bn and a remaining performance obligation (RPO) backlog of $638bn — up 363% in a year, driven by enormous AI contracts including a reported ~$300bn multiyear deal with OpenAI. Yet the shares have collapsed: June 2026 was Oracle's worst month in over three decades and late June its worst week since the 2001 dot-com bust, with the stock hitting a 12-month low of $131.54 on 13 July — down more than 60% from September 2025's $345.72 high. The tension is simple: a record backlog on one side; negative $23.7bn free cash flow, $129.5bn of borrowings and a credit downgrade on the other. This report sets out the facts.

1. Company Snapshot

Field	Value
Company	Oracle Corporation
Ticker / Exchange	ORCL / NYSE
Headquarters	Austin, Texas, USA
Founded	1977 (by Larry Ellison, Bob Miner and Ed Oates)
CEO	Clay Magouyrk and Mike Sicilia (co-CEOs since September 2025); Larry Ellison remains Chairman & CTO, Safra Catz Executive Vice Chair
Employees	~141,000 (FY2026 10-K — down ~21,000 in a year amid AI-driven restructuring)
Sector	Enterprise software and cloud infrastructure
Revenue (FY2026, ended 31 May 2026)	$67,357m (up 17% year-over-year)
Net income (FY2026, GAAP, available to common)	$16,984m (non-GAAP $22,234m, boosted by one-time investment gains)
Market cap	~$380bn (13 July 2026, share price $131.54)
Dividend	$0.50 per quarter ($2.00 annualised; next payment 24 July 2026)

2. Bull vs Bear Case

Bull Case

• Unprecedented revenue visibility: RPO of $638bn (up 363% year-over-year, and up $85bn sequentially in Q4 alone) is a contracted backlog nearly ten times FY2026 revenue; $75bn of the large AI contracts is prepaid or customer-supplied hardware, reducing the capital Oracle itself must raise.
• OCI is hyper-growing: cloud infrastructure revenue rose 77% to $18.1bn in FY2026 and 93% in Q4; management guides total cloud revenue up 57–63% in constant currency for Q1 FY2027 and confirms $90bn total revenue guidance for FY2027.
• Earnings are compounding through the build-out: FY2026 GAAP EPS rose 34% to $5.83 and operating cash flow jumped 54% to a record $32.0bn — the P&L is strengthening even while the balance sheet carries the datacentre construction.
• Differentiated AI database franchise: the Oracle Multicloud AI Database grew 404% in Q4 — the fastest-growing product in company history — and a new AI version of the Cerner patient-care system is expected to push Oracle Health to double-digit growth in FY2027.
• Valuation reset: after a ~62% fall from the high, the stock trades at roughly 16x the company's own FY2027 non-GAAP EPS guidance of $8.05 — a fraction of the multiple it commanded in September 2025.

Bear Case

• Free cash flow is deeply negative: −$23.7bn in FY2026 as capex hit $55.7bn (up 162%); Oracle is spending far faster than the business generates cash and funding the gap externally.
• Leverage and rating pressure: total borrowings reached $129.5bn at 31 May 2026 after $43bn of new debt in FY2026; S&P downgraded Oracle to BBB−, one notch above junk, and another ~$40bn of debt and equity (including a $20bn at-the-market equity programme diluting holders by roughly 5%) is planned for FY2027.
• Extreme customer concentration: OpenAI's reported ~$300bn contract is close to half the RPO and does not begin until 2027 — if OpenAI's demand or funding tightens, Oracle absorbs the loss through leases and debt already on its books.
• Backlog is not revenue: converting $638bn of RPO depends on GPU supply, datacentre power availability and customers actually consuming capacity on schedule; any slippage pushes revenue right while interest and depreciation land on time.
• Momentum is broken: the worst month in three decades (June 2026, ~−35%), the worst week since 2001, and a 12-month low of $131.54 on 13 July show the market repricing execution risk — legacy software revenue is also shrinking (down 1% in FY2026).

3. Revenue Segments

Oracle reports revenue by offering. Figures below are FY2026 (year ended 31 May 2026) from the Q4 FY2026 earnings release.

Segment	% of revenue	What it is
Cloud services (IaaS + SaaS)	50.5% ($33,989m)	Oracle Cloud Infrastructure (OCI) compute/storage/networking for AI training and inference ($18,101m, +77%) plus cloud applications — Fusion ERP, NetSuite, Oracle Health ($15,888m, +11%).
Software (licence + support)	36.4% ($24,541m)	On-premise database and middleware licences ($4,737m, −9%) and the high-margin annuity of software support contracts ($19,804m, +1%). Slowly declining as customers migrate to cloud.
Services	8.5% ($5,743m)	Consulting, implementation and education services around Oracle products (+10%).
Hardware	4.6% ($3,084m)	Engineered systems (Exadata), servers and storage, including hardware support (+5%).

4. Business Model

How the money is made: Oracle sells the plumbing of enterprise computing — databases, business applications and, increasingly, raw AI infrastructure. Historically the model was licence-plus-support: sell a perpetual database licence, then collect ~95%-renewal support fees for decades. That annuity ($19.8bn of support revenue in FY2026) still funds the company. The growth engine is now OCI: Oracle builds gigawatt-scale datacentres, fills them with GPUs, and rents capacity under long-term contracts to AI labs and enterprises — capital-intensive, but contracted years ahead (hence the $638bn RPO).

Unit economics: software support and SaaS carry very high incremental margins; OCI margins are structurally lower and front-loaded with depreciation — FY2026 "cloud and software" cost of revenue rose 52% against 17% revenue growth, and depreciation more than doubled year-over-year to $7.6bn as new capacity came online. Non-GAAP operating margin held at 43% in FY2026 (GAAP 31%). Interest expense reached $4.6bn against $129.5bn of borrowings.

Moat: mission-critical database entrenchment (switching costs measured in decades), a full-stack position spanning applications to silicon-adjacent infrastructure, and — in AI — early capacity commitments and networking design that made OCI the fastest-growing hyperscale cloud. The Multicloud AI Database (Oracle databases running inside AWS/Azure/Google datacentres) monetises rivals' footprints.

Capital allocation: the priority has flipped from buybacks (just $95m in FY2026 versus $600m in FY2025 and tens of billions in prior years) to datacentre capex ($55.7bn). The dividend continues at $0.50/quarter (~$5.8bn paid in FY2026), and FY2026 added $43bn of debt plus $5bn of mandatory convertible preferred equity; ~$40bn more is planned for FY2027.

5. Financial Health

All figures from Oracle earnings releases (SEC Form 8-K exhibits) and EDGAR XBRL filings. Oracle's fiscal year ends 31 May — "FY2026" ended 31 May 2026.

Fiscal Year	Revenue ($m)	YoY %	GAAP EPS	Adjusted EPS	Dividend/share	Long-term debt (YE, $m)
FY2022	$42,440m	+4.8%	$2.41	$4.90	$1.28	$72,110m
FY2023	$49,954m	+17.7%	$3.07	$5.12	$1.44	$86,420m
FY2024	$52,961m	+6.0%	$3.71	$5.56	$1.60	$76,264m
FY2025	$57,399m	+8.4%	$4.34	$6.03	$1.80	$85,297m
FY2026	$67,357m	+17.3%	$5.83	$7.63	$2.00	$122,342m

Notes: FY2023's jump reflects the first full year of the Cerner acquisition. FY2026 non-GAAP EPS of $7.63 includes one-time investment gains (sale of the Ampere chip stake and Bloom Energy warrants); excluding them it would be $6.83, up 13%. Dividend/share reflects the declared quarterly rate ($0.32, raised to $0.40 in March 2023 and to $0.50 in April 2025). Long-term debt is notes payable and other borrowings, non-current, at fiscal year-end; a further $7,199m was current at 31 May 2026. FY2026 operating cash flow was $31,977m, capital expenditure $55,663m, free cash flow −$23,686m, and D&A $9,294m (depreciation $7,623m + intangible amortisation $1,671m), all per the FY2026 cash flow statement.

Quarter / Half	Revenue ($m)	Adjusted EPS	GAAP EPS
Q4 FY2026 (ended 31 May 2026)	$19,184m	$2.11	$1.45
Q3 FY2026	$17,190m	$1.79	$1.27
Q2 FY2026	$16,058m	$2.26	$2.10
Q1 FY2026	$14,926m	$1.47	$1.01
FY 2026 total	$67,357m	$7.63	$5.83

Q2 FY2026's outsized EPS (GAAP $2.10, up 91%) included large one-time investment gains; Q4's $2.11 non-GAAP would have been $2.03 excluding them. Cash and marketable securities stood at $31.9bn at 31 May 2026 against total borrowings of $129.5bn.

6. Valuation Metrics

Raw metrics, July 2026. Not opinions on whether the stock is cheap or expensive.

Metric	Value
Market cap	~$380bn (share price $131.54 at 13 July 2026 close, ~2.9bn shares)
Trailing P/E (GAAP)	~23x ($131.54 / FY2026 GAAP EPS $5.83)
P/E (forward)	~16x ($131.54 / management's FY2027 non-GAAP EPS guidance of $8.05) — non-GAAP guidance basis
P/S (TTM)	~5.6x (market cap ~$380bn / FY2026 revenue $67.36bn)
Enterprise value	~$478bn (market cap ~$380bn + total borrowings $129.5bn ($7,199m current + $122,342m non-current) − cash and marketable securities $31.9bn per 31 May 2026 balance sheet)
EV/EBITDA (TTM)	~16x (EV ~$478bn / FY2026 EBITDA ~$29.9bn = GAAP operating income $20,606m + depreciation $7,623m + intangible amortisation $1,671m)
P/FCF	n/m — free cash flow is negative (operating cash flow $31,977m − capex $55,663m = −$23,686m per FY2026 cash flow statement); on operating cash flow alone the multiple would be ~12x
52-week high	$345.72 (September 2025)
52-week low	$130.76
Short interest (% of float)	~1.3% of shares outstanding (37.7m shares, 15 June 2026 settlement)
Days to cover	~1.2

7. What Are They Building

Oracle is building AI datacentres at a scale matched only by the hyperscalers — $55.7bn of capex in FY2026, up 162%, with gigawatt campuses intended to run on clean energy from natural-gas fuel cells. The contracted demand behind that build is the $638bn RPO, dominated by large AI training and inference deals (reportedly ~$300bn from OpenAI over roughly five years starting 2027); $75bn of these contracts is prepaid or customer-supplied GPUs, which reduces Oracle's own funding needs. On the software side, the flagship projects are the Oracle Multicloud AI Database — Oracle databases running natively inside AWS, Azure and Google Cloud, which grew 404% in Q4 FY2026, the fastest-growing product in company history — and the AI rebuild of Oracle Health: a completely new AI version of the Cerner hospital and clinic patient-care system, plus AI clinical-trial and molecular-design tooling, which management expects to push Oracle Health to double-digit growth in FY2027. Autonomous database, high-performance RDMA networking and Exadata engineered systems remain the differentiated substrate underneath. Track the price action on our Live Charts page.

8. Competitive Landscape

Oracle's cloud infrastructure business competes directly with the three hyperscalers; its applications business fights SAP, Workday and Salesforce. Market caps as retrieved July 2026.

Peer	Market cap (Jul 2026)	Key 2025 metric
Microsoft (MSFT)	~$2.92tn	Azure revenue surpassed $75bn in FY2025 (ended 30 Jun 2025), up 34%; Microsoft Cloud $168.9bn
Amazon (AMZN)	~$2.57tn	AWS 2025 revenue $128.7bn, up 19%, with a Q4 run-rate of ~$142bn
Alphabet (GOOGL)	~$4.33tn	Google Cloud 2025 revenue $58.7bn, up ~36%, exiting the year above a $70bn run-rate
NVIDIA (NVDA)	~$4.85tn (1 Jul 2026)	Supplier rather than direct rival — the GPU spend driving Oracle's capex; world's largest company by market cap

OCI is far smaller than AWS or Azure in absolute terms ($18.1bn vs $128.7bn and $75bn+ respectively) but is growing several times faster from its base, and Oracle is the only database incumbent among the four.

9. Leadership & Insider Activity

Oracle promoted Clay Magouyrk (previously President of Oracle Cloud Infrastructure, ex-AWS, architect of Gen2 OCI) and Mike Sicilia (previously President of Oracle Industries, who joined via the Primavera acquisition) to co-CEOs on 22 September 2025. Safra Catz, CEO since 2014, became Executive Vice Chair of the board; founder Larry Ellison remains Chairman and Chief Technology Officer. The workforce shrank by roughly 21,000 (~13%) to 141,000 during FY2026 as AI adoption reshaped operations.

Name	Date	Type	Shares	Price	Value	Plan Type
Jeffrey Henley (Vice Chairman)	24 Jun 2026	Option exercise and sale	400,000	~$159 avg	$63.66m	Rule 10b5-1 (adopted 2 Jan 2026)
Lawrence Ellison (Chairman & CTO)	23 Oct 2025	Stock option grant	571,286	$280.07 exercise price	—	Equity award (vests 25%/yr, expires 2035)

Beyond the pre-scheduled Henley sale and routine equity awards, searches found no material insider open-market buying in 2026; no purchases by the new co-CEOs were identified following the June share-price fall.

10. Risks

• Leverage and funding (Financial): borrowings of $129.5bn, an S&P downgrade to BBB− (one notch above junk), and a planned ~$40bn FY2027 raise — including a $20bn at-the-market equity programme implying roughly 5% dilution — leave little room for execution error if rates stay high or credit markets tighten.
• Negative free cash flow (Financial): −$23.7bn in FY2026 with capex guided higher still; depreciation and interest costs land on schedule even if revenue conversion slips.
• Customer concentration (Operational): OpenAI reportedly accounts for close to half the $638bn RPO under a ~$300bn contract that does not begin until 2027; OpenAI's own funding needs make this a genuine counterparty risk that Oracle would absorb through leases and debt already on its books.
• Backlog conversion (Operational): turning RPO into revenue depends on GPU supply, grid power availability and customer consumption schedules — all outside Oracle's full control.
• Hyperscaler competition (Competitive): AWS, Azure and Google Cloud have larger scale, stronger balance sheets and their own AI silicon; price competition for AI capacity could compress OCI economics precisely as Oracle's depreciation peaks.
• Legacy erosion (Operational): software revenue fell 1% in FY2026 (licences −9%); the cloud transition must keep outrunning the decline of the licence/support annuity that funds the dividend.

11. Recent Developments

• 10 Jun 2026 — Record Q4 and FY2026 results. Q4 revenue $19.2bn (+21%), Q4 GAAP EPS $1.45, non-GAAP $2.11; FY2026 revenue $67.4bn (+17%), GAAP EPS $5.83 (+34%); RPO up $85bn sequentially to $638bn (+363% YoY); FY2027 guidance confirmed at $90bn revenue with non-GAAP EPS raised to $8.05. Operating cash flow a record $32bn; free cash flow −$23.7bn.
• 23 Jun 2026 — Workforce down ~21,000 in a year. Headcount fell ~13% to 141,000 during FY2026, with the 10-K citing AI adoption and deployment across operations as a driver of workforce reductions.
• 26 Jun 2026 — Worst week since the 2001 dot-com bust. The stock closed out its worst week in 25 years as investors dwelt on the $130bn+ debt load, negative free cash flow and S&P's downgrade to BBB−; June ended as Oracle's worst month in over three decades (roughly −35%).
• 13 Jul 2026 — Shares hit a 12-month low of $131.54 (−6.5% on the day), about 62% below September 2025's $345.72 peak, as debate continued over whether the ~$300bn OpenAI commitment — nearly half the backlog, starting 2027 — is an asset or a liability.

12. Key Dates

Check our Economic Calendar for macro events, and discuss this name on the ChartsView Forum.

• 24 Jul 2026 — Quarterly dividend of $0.50/share paid (record date 10 July 2026)
• 14 Sep 2026 — Q1 FY2027 results (confirmed, after US market close); guidance is total revenue +27–29% and non-GAAP EPS $1.72–$1.76
• Expected Nov 2026 — Annual meeting of stockholders
• Expected FY2027 — ~$40bn of debt and equity financing, including the $20bn at-the-market equity issuance (no additional debt expected in calendar 2026)
• Expected 2027 — Reported ~$300bn OpenAI contract begins contributing to revenue

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Disclaimer: This research is produced by ChartsView for educational and informational purposes only. It does not constitute financial advice or a recommendation to buy or sell any security. All information is sourced from publicly available company filings, press releases, and official data. ChartsView does not use analyst opinions or third-party ratings. Always conduct your own due diligence and consider your personal financial situation before making investment decisions. Past performance is not indicative of future results.

Last Updated: 10 July 2026

Texas Instruments is the world's largest maker of analog and embedded processing semiconductors — the low-cost, high-margin chips that manage power, convert signals and run simple compute inside cars, factory equipment, phones, appliances and, increasingly, AI data-centre power systems. The business model is unusual for a chipmaker: TI owns most of its own 300mm wafer fabs, sells more than 80,000 catalogue parts to over 100,000 customers, and returns nearly all of its free cash flow to shareholders. After a two-year cyclical trough, fiscal 2025 revenue rebounded 13% to $17.68bn and first-quarter 2026 revenue jumped 19% year over year, led by industrial and data-centre demand. In February 2026 TI agreed to acquire Austin-based Silicon Labs for roughly $7.5bn, its largest deal in years. This report walks through the numbers, the valuation and the risks.

1. Company Snapshot

Field	Value
Company	Texas Instruments Incorporated
Ticker / Exchange	TXN (Nasdaq)
Sector	Technology — Semiconductors (analog & embedded)
CEO	Haviv Ilan (President & CEO since 2023; also Chairman from 2026)
Headquarters	Dallas, Texas, USA
Market cap	~$280.9bn (Jul 2026)
Revenue (FY2025)	$17.682bn (+13.1% YoY)
Net income (FY2025)	$5.00bn
GAAP diluted EPS (FY2025)	$5.45
Employees	~34,000
Dividend	$1.42 per quarter ($5.68 annualised); 22 consecutive years of increases

2. Bull & Bear Case

Bull Case

• Analog scale and catalogue moat: TI is the largest analog chipmaker in the world with more than 80,000 parts sold to over 100,000 customers, a breadth no rival matches and a franchise with very long product lifecycles.
• Cyclical recovery underway: After a two-year downturn, FY2025 revenue grew 13% and Q1 2026 rose 19% year over year, with the data-centre business up roughly 90% and industrial up about 30%.
• In-house 300mm manufacturing: TI's owned US fabs (Sherman, Lehi, Richardson) give it structural cost advantage, supply security and eligibility for CHIPS Act incentives as competitors lean on outsourced foundries.
• Silicon Labs acquisition: The ~$7.5bn all-cash deal agreed February 2026 adds wireless connectivity, edge-AI reach and reshored manufacturing, with ~$450m of targeted annual synergies within three years.
• Shareholder returns: 22 straight years of dividend increases and consistent buybacks make TI one of the most reliable capital-return stories in semiconductors.

Bear Case

• Free cash flow compressed by capex: A multi-year fab build-out pushed FY2025 capex to $4.55bn, cutting free cash flow to $2.60bn and leaving the shares on a very high price-to-free-cash-flow multiple.
• Rich valuation: At roughly 53x trailing GAAP earnings the stock prices in a strong recovery; any demand wobble or margin slip could de-rate it quickly.
• Cyclicality and inventory risk: Analog demand tracks industrial and automotive capex; the 2023–2024 slump showed how sharply revenue and margins can fall.
• China and tariff exposure: A large share of revenue touches China and automotive supply chains, exposing TI to tariffs, export controls and local-competitor substitution.

3. Business Segments

Segment	% of revenue	What it is
Analog	~79% ($14.01bn FY2025)	Power management and signal-chain chips — converters, amplifiers, power supplies. TI's core franchise, up 15% in FY2025.
Embedded Processing	~15% ($2.70bn FY2025)	Microcontrollers, processors, radar and connectivity products used in cars, factories and appliances; up 6% in FY2025.
Other	~6% ($0.97bn FY2025)	DLP display technology, calculators, custom ASICs and royalties.

4. How It Makes Money

A catalogue business, not a project business. Unlike leading-edge logic makers that chase a handful of giant customers, TI sells tens of thousands of standardised parts at modest prices to a very long tail of customers. Many designs stay in production for a decade or more, so revenue is broad, sticky and less dependent on any single win.

Owning the factory is the strategy. TI manufactures the bulk of its chips in its own 300mm wafer fabs, where the larger wafer yields far more dies per unit of cost than the 200mm fabs most analog peers still run. That internal capacity is the engine behind TI's gross margins and its decision to spend heavily on new US fabs even through the downturn.

Cash goes back to owners. Over time TI aims to return all free cash flow to shareholders through dividends and buybacks. The dividend has risen for 22 consecutive years, and the heavy capex cycle now underway is explicitly framed as building capacity to grow that free cash flow per share over the long run.

5. Financial Health

All figures below are taken from TI's audited annual reports and quarterly earnings releases (SEC filings). TI reports on a GAAP basis and does not publish a separate non-GAAP adjusted EPS, so the Adjusted EPS column mirrors GAAP.

Fiscal Year	Revenue	YoY %	GAAP EPS	Adjusted EPS	Dividend/share	Long-term debt (YE)
2021	$18.344bn	—	$8.26	$8.26¹	$4.21	$7.241bn
2022	$20.028bn	+9.2%	$9.41	$9.41¹	$4.69	$8.235bn
2023	$17.519bn	−12.5%	$7.07	$7.07¹	$5.02	$10.624bn
2024	$15.641bn	−10.7%	$5.20	$5.20¹	$5.26	$12.846bn
2025	$17.682bn	+13.1%	$5.45	$5.45¹	$5.50	$13.548bn

¹ TI does not report a non-GAAP adjusted EPS; the adjusted column mirrors GAAP diluted EPS.

Quarter	Revenue	Adjusted EPS	GAAP EPS
Q1 2026	$4.83bn	$1.68¹	$1.68
Q4 2025	$4.42bn	$1.27¹	$1.27
Q3 2025	$4.74bn	$1.48¹	$1.48
Q2 2025	$4.45bn	$1.41¹	$1.41
Q1 2025	$4.07bn	$1.28¹	$1.28
FY 2025 total	$17.68bn	$5.45¹	$5.45

Balance sheet at 31 Dec 2025: long-term debt $13.548bn plus $0.500bn current portion (total $14.05bn), against cash and short-term investments of $4.88bn. Operating cash flow was $7.15bn for FY2025; capital expenditure was $4.55bn as the fab build-out continued.

6. Valuation

Raw metrics, July 2026. Not opinions on whether the stock is cheap or expensive.

Metric	Value
Market cap	~$280.9bn (Jul 2026)
Trailing P/E (GAAP)	~53x (price ~$309 / trailing-12-month EPS ~$5.85, i.e. FY2025 $5.45 less Q1 2025 $1.28 plus Q1 2026 $1.68)
P/E (forward)	n/a — TI provides one-quarter-ahead guidance only (Q2 2026 EPS guided $1.77–$2.05)
P/S (TTM)	~15x (market cap ~$280.9bn / trailing-12-month revenue ~$18.4bn)
EV/EBITDA (TTM)	~36x (EV ~$290bn / EBITDA ~$8.0bn; EBITDA = operating income $6.02bn + D&A ~$2.0bn per FY2025 filings)
P/FCF	~108x on FY2025 FCF $2.60bn (operating CF $7.15bn − capex $4.55bn); ~64x on trailing-12-month FCF ~$4.4bn as capex eases
Enterprise value	~$290bn (market cap ~$280.9bn + total debt $14.05bn − cash & ST investments $4.88bn per FY2025 balance sheet)
52-week high	$334.03
52-week low	$152.80
Short interest (% of float)	~2.1% of float
Days to cover	~2.4 days

7. What Are They Building

TI's central bet is capacity. The company is spending billions on new 300mm wafer fabs in Sherman, Texas and Lehi, Utah, aiming to make the large majority of its chips in-house on US soil by the end of the decade. Management's argument is that owning geopolitically dependable, low-cost capacity will let TI win share as customers seek supply security, and will compound free cash flow per share once the heavy spending rolls off.

The second build is reach into faster-growing end markets. The data-centre business — power-management chips for AI servers — grew roughly 90% year over year in Q1 2026 off a small base, and the pending Silicon Labs acquisition adds wireless connectivity and edge-AI products aimed at the same industrial and IoT customers TI already serves. Read more market context on the ChartsView Live Charts and Economic Calendar.

8. Peer Comparison

Peer	Market cap (Jul 2026)	Key 2025 metric
Analog Devices (ADI)	~$188bn	Fiscal 2025 revenue ~$11.0bn (+17%); nearest analog rival
NXP Semiconductors (NXPI)	~$52bn	FY2025 revenue $12.27bn; automotive-heavy analog/embedded
Microchip Technology (MCHP)	~$46bn	FY2025 (Mar) revenue $4.40bn; microcontroller-led, deep cyclical trough

9. Insider Activity

Recent Form 4 filings show routine option-exercise-and-sell activity by directors and officers — common for TI executives whose compensation is heavily equity-based, including chief executive Haviv Ilan. No open-market accumulation was disclosed.

Name	Date	Type	Shares	Price	Value	Plan Type
Martin S. Craighead (Director)	28 May 2026	Sale	10,000	~$320.41	~$3.20m	Open market
Carrie S. Cox (Director)	13 May 2026	Option exercise & sale	8,838	~$306	~$2.70m	Exercise/sell
Shanon J. Leonard (SVP)	11 May 2026	Sale	4,963	~$295.22	~$1.47m	Open market
Julie C. Knecht (VP & CAO)	30 Apr 2026	Sale	9,956	~$278.70	$2.77m	Open market
Rafael Lizardi (CFO)	Q2 2026	Option exercise & sale	47,734	~$308	~$14.7m	Exercise/sell

10. Key Risks

• Cyclical demand: Analog and embedded revenue tracks industrial and automotive capital spending, which can fall sharply and quickly, as the 2023–2024 downturn demonstrated.
• Capex and free-cash-flow risk: The multi-year fab build-out keeps capital spending elevated; if end-demand disappoints, free cash flow could stay depressed for longer than the market expects.
• Valuation risk: At roughly 53x trailing earnings the shares leave little room for disappointment on growth or margins.
• China and geopolitical exposure: Tariffs, export controls and the rise of domestic Chinese analog competitors could erode a meaningful slice of demand.
• Integration risk: The ~$7.5bn Silicon Labs acquisition must clear regulators and be integrated successfully to deliver its targeted synergies.
• Margin pressure: Higher depreciation from new fabs and under-utilisation during soft periods can weigh on gross margins.

11. Recent Developments

• 22 Apr 2026 — Strong Q1 2026 results. Revenue of $4.83bn (+19% YoY) and EPS of $1.68 beat expectations, led by industrial and a data-centre business up roughly 90% year over year; the shares hit fresh highs.
• 04 Feb 2026 — Silicon Labs acquisition agreed. TI agreed to buy Austin-based Silicon Labs for $231.00 per share in cash, an enterprise value of about $7.5bn, to expand in wireless connectivity and edge AI; close expected in the first half of 2027 subject to approvals.
• 28 Jan 2026 — FY2025 results. Full-year revenue of $17.68bn (+13%) and GAAP EPS of $5.45 confirmed the cyclical recovery, with the Analog segment up 15%.
• 01 Jul 2026 — Q2 2026 call scheduled. TI confirmed it will report second-quarter results on 22 July 2026, guiding revenue of $5.0–$5.4bn and EPS of $1.77–$2.05.

12. Key Dates

• 22 Jul 2026 — Q2 2026 earnings release and conference call
• Expected Oct 2026 — Q3 2026 earnings release (late October)
• Expected H1 2027 — targeted completion of the Silicon Labs acquisition

Discuss this stock with other members on the ChartsView Forum.

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Disclaimer: This research is produced by ChartsView for educational and informational purposes only. It does not constitute financial advice or a recommendation to buy or sell any security. All information is sourced from publicly available company filings, press releases, and official data. ChartsView does not use analyst opinions or third-party ratings. Always conduct your own due diligence and consider your personal financial situation before making investment decisions. Past performance is not indicative of future results.

Last Updated: 8 July 2026

Synopsys, Inc. (NASDAQ: SNPS) is the world's largest supplier of electronic design automation (EDA) software, semiconductor design IP and — following its $35 billion acquisition of Ansys in July 2025 — engineering simulation and analysis software. The company describes itself as the leader in "engineering solutions from silicon to systems": its tools are used to design, verify and simulate virtually every advanced chip powering the AI build-out. Fiscal year 2026 is a transition year: revenue guidance has been raised to roughly $9.67 billion, Ansys integration synergies are accelerating, activist investor Elliott Management has taken a multibillion-dollar stake and joined the board, and the company carries roughly $10 billion of long-term debt from the deal. This report sets out the facts from primary sources — company press releases and SEC filings — with no analyst opinions.

1. Company Snapshot

Field	Value
Company	Synopsys, Inc.
Ticker / Exchange	SNPS / NASDAQ
Headquarters	Sunnyvale, California, USA
Founded	1986
CEO	Sassine Ghazi (President & CEO)
CFO	Shelagh Glaser
Employees	≈28,000 worldwide post-Ansys (a reduction of roughly 10% is underway as part of the FY2026 restructuring programme)
Market cap	≈$83.4bn (7 Jul 2026; ≈191.5m shares at ≈$435.65)
Revenue (FY2025, continuing operations)	$7,054.2m (+15.1% YoY; Ansys contributed $756.6m from 17 Jul 2025 close)
Net income (FY2025, GAAP, continuing operations)	$1,336.1m ($8.07 per diluted share)
Fiscal year end	31 October
Sector	Technology — EDA software, semiconductor IP and engineering simulation
Backlog	$11.4bn contracted but unsatisfied performance obligations (at 31 Oct 2025)

2. Bull & Bear Case

Bull Case

• AI is scaling demand for chip design: Management states that AI is expanding semiconductor demand, architectural diversity and chip complexity, driving demand across the whole portfolio. Q2 FY2026 revenue of $2.276bn beat guidance and full-year revenue guidance was raised to $9.665bn at the midpoint.
• Silicon-to-systems platform via Ansys: The $35bn Ansys acquisition (closed 17 Jul 2025) added simulation and analysis to EDA and IP, with FY2026 Ansys revenue expected at ~$2.96bn and synergies accelerating; Design Automation segment revenue grew 80%+ YoY in Q2 FY2026 with a 43.3% adjusted operating margin.
• Margin expansion and cash generation: FY2026 non-GAAP EPS guidance was raised to $14.76 at the midpoint on cost discipline; the company targets ~$2.3bn operating cash flow and ~$2.0bn free cash flow for FY2026.
• Activist catalyst and portfolio sharpening: Elliott Management built a multibillion-dollar stake, a cooperation agreement was signed on 27 May 2026 (Jesse Cohn joined the board 1 Jun 2026), non-core businesses (Optical Solutions, PowerArtist, Processor IP) are being divested, and a 30 Sep 2026 Investor Day will set out long-term targets.

Bear Case

• Acquisition leverage: Long-term debt stood at $10.01bn at 30 Apr 2026 (vs $15.6m a year before the deal), with $133m of quarterly interest expense in Q2 FY2026; deleveraging depends on sustained cash generation.
• GAAP profitability collapsed during integration: Q2 FY2026 GAAP EPS was just $0.09 (vs $2.24 a year earlier) as amortisation of acquired intangibles (~$404m per quarter) and $234m of first-half restructuring charges weigh; FY2026 GAAP EPS guidance is only $2.49–$2.91.
• Export-control and China risk: Guidance explicitly assumes no further changes to US export restrictions or the Entity List; EDA has been directly targeted in past US-China restrictions, and rules can change abruptly.
• Design IP segment is shrinking: Design IP revenue fell to $454.2m in Q2 FY2026 (from $482.0m a year earlier) with the adjusted margin down to 24.4% from 31.2%, and resources are being reallocated as the Processor IP business is sold to GlobalFoundries.
• Valuation still demands execution: At ~$435 the stock trades at roughly 29.5x forward non-GAAP EPS and ~9.6x trailing sales, while the share price is ~33% below its 52-week high of $651.73 — the market is already debating whether growth and synergies will be delivered.

3. Business Segments

Synopsys reports two segments. Design Automation now includes silicon design and verification, Ansys simulation products, hardware-assisted verification and manufacturing software; Design IP covers interface, foundation, security and embedded processor IP. Figures below are FY2025 (ended 31 Oct 2025).

Segment	% of revenue	What it is
Design Automation	75.2% ($5,302.4m FY2025; 80.0% of revenue by Q2 FY2026)	EDA software for chip design and verification, Ansys simulation and analysis products, system integration, FPGA design software, verification hardware and manufacturing software. FY2025 adjusted operating margin 41.7%.
Design IP	24.8% ($1,751.8m FY2025; 20.0% of revenue by Q2 FY2026)	Pre-designed building blocks licensed to chipmakers: interface IP (PCIe, HBM, USB), foundation IP, embedded memories, security IP and embedded processors. FY2025 adjusted operating margin 23.9%; Processor IP business being divested to GlobalFoundries.

4. Business Model & Strategy

How Synopsys makes money. Revenue is dominated by time-based software licences and maintenance — recurring arrangements under which chipmakers subscribe to design tools over multi-year terms — plus upfront product sales (including verification hardware) and IP licensing. In Q2 FY2026, time-based products contributed $945.6m, upfront products $546.3m and maintenance and service $784.1m. The model produces a large contracted backlog ($11.4bn at FY2025 year-end), giving unusually high revenue visibility for a technology company.

Unit economics. Adjusted segment operating margins run in the low-40s per cent for Design Automation and low-20s for Design IP. The company is transitioning to a three-year normalised non-GAAP tax rate of 18% and guides FY2026 non-GAAP expenses of $5,675–5,725m against ~$9.67bn revenue — an implied non-GAAP operating margin in the region of 40%. Capital intensity is low (FY2026 capex guided at ~$300m against ~$2.3bn operating cash flow).

Moat. EDA is an entrenched duopoly-plus (Synopsys, Cadence, Siemens EDA) with decades of accumulated tool flows, engineer training and foundry certification; switching costs are extremely high. Ansys adds the leading simulation franchise, extending the moat from silicon into systems engineering (aerospace, automotive, industrial). The strategy is to sell the combined silicon-to-systems platform into AI-era design complexity, prune non-core assets, capture cost synergies, and de-lever — with long-term targets to be detailed at the 30 Sep 2026 Investor Day.

5. Financial Health

Figures from Synopsys press releases and SEC filings, on a continuing-operations basis from FY2023 onward (the Software Integrity business, sold 30 Sep 2024, is treated as discontinued). FY2021–FY2022 are as originally reported and include Software Integrity¹. Synopsys pays no dividend. Fiscal years end 31 October.

Fiscal Year	Revenue	YoY %	GAAP EPS	Adjusted EPS	Dividend/share	Long-term debt (YE)
FY2021¹	$4,204m	+14%	$4.81	$6.84	Nil	—
FY2022¹	$5,082m	+20.9%	$6.29	$8.90	Nil	—
FY2023²	$5,318m	n/m²	$7.91	$10.54	Nil	—
FY2024³	$6,127.4m	+15.2%	$9.25	$13.20	Nil	$15.6m
FY2025	$7,054.2m	+15.1%	$8.07	$12.91	Nil	$13,462.4m

¹ FY2021–FY2022 as reported, including the Software Integrity business divested on 30 Sep 2024. ² FY2023 restated to continuing operations (as-reported FY2023 revenue including Software Integrity was $5,843m); YoY not meaningful against the FY2022 as-reported base. ³ FY2024 was a 53-week year. FY2025 GAAP EPS is lower than FY2024 despite higher revenue because of Ansys-related amortisation, interest expense and integration costs, partly offset by divestiture gains.

Quarterly detail (most recent first; FY2026 is in progress — Q1/Q2 shown with FY2025 quarters and the FY2025 total):

Quarter	Revenue	Adjusted EPS	GAAP EPS
Q2 FY2026 (ended 30 Apr 2026)	$2,276.0m	$3.35	$0.09
Q1 FY2026 (ended 31 Jan 2026)	$2,408.8m	$3.76	$0.34
Q4 FY2025 (ended 31 Oct 2025)	$2,254.9m	$2.90	$2.39
Q3 FY2025 (ended 31 Jul 2025)	$1,739.7m	$3.32	$1.55
FY2025 total	$7,054.2m	$12.91	$8.07

Balance sheet (30 Apr 2026): cash, cash equivalents and short-term investments $2,484.4m; short-term debt $22.1m; long-term debt $10,013.8m (reduced from $13,462.4m at 31 Oct 2025 after $3.46bn of first-half repayments, helped by a $2.0bn common stock private placement). First-half FY2026 operating cash flow was $1,485.8m, capex $89.5m, and depreciation and amortisation $907.2m. FY2026 targets: operating cash flow ~$2.3bn, free cash flow ~$2.0bn, capex ~$300m.

6. Valuation

Raw metrics, July 2026. Not opinions on whether the stock is cheap or expensive.

Metric	Value
Market cap	≈$83.4bn (7 Jul 2026; ≈191.5m shares at ≈$435.65)
Enterprise value	≈$91.0bn (market cap ≈$83.4bn + total debt ≈$10.04bn ($22.1m short-term + $10,013.8m long-term) − cash and short-term investments ≈$2.48bn, per 30 Apr 2026 balance sheet)
Trailing P/E (GAAP)	≈108x — distorted (TTM GAAP net income ≈$773m is suppressed by ~$404m/quarter of Ansys intangible amortisation and restructuring; TTM non-GAAP EPS of $13.33 implies ≈33x)
P/E (forward)	≈29.5x on FY2026 non-GAAP EPS guidance midpoint of $14.76 (GAAP EPS guidance of $2.49–$2.91 implies ≈161x GAAP-basis)
P/S (TTM)	≈9.6x (market cap ≈$83.4bn / TTM revenue ≈$8.68bn to 30 Apr 2026)
EV/EBITDA (TTM)	≈44x GAAP-basis (EV ≈$91.0bn / TTM GAAP EBITDA ≈$2.08bn = TTM operating income ≈$0.61bn + TTM D&A ≈$1.47bn per cash flow statements); GAAP EBITDA is depressed by restructuring and acquisition charges — company-adjusted segment operating income was $2.63bn in FY2025 alone
P/FCF	≈32x (market cap ≈$83.4bn / TTM FCF ≈$2.63bn; FCF = TTM operating CF ≈$2.80bn − TTM capex ≈$0.16bn per cash flow statements); against FY2026 guided FCF of ~$2.0bn the multiple is ≈42x
52-week high	$651.73 (30 Jul 2025)
52-week low	$376.18 (18 Nov 2025)
Short interest (% of float)	≈2.96% (5.64m shares short as of 29 May 2026)
Days to cover	≈2.4

7. What Are They Building?

Synopsys is building the design platform for the AI era of semiconductors. Management's stated priorities are: integrating Ansys to create joint silicon-to-systems solutions (simulation of the physics of chips and the systems they power alongside the design tools themselves); applying AI across the portfolio to raise engineering productivity as chip complexity and architectural diversity accelerate; and expanding hardware-assisted verification and manufacturing software for advanced nodes and multi-die designs.

The portfolio is simultaneously being pruned to focus investment: the Optical Solutions Group and PowerArtist RTL businesses were divested during FY2025–26, and on 14 Jan 2026 the company agreed to sell its Processor IP Solutions business to GlobalFoundries, saying the sale lets it extend leadership in interface and foundation IP and pursue "the highest-value, AI-driven opportunities from cloud to edge". Remaining R&D (Q2 FY2026 R&D expense: $700.1m) concentrates on advanced-node EDA flows, verification hardware, high-bandwidth interface IP and Ansys multiphysics simulation. Management has said it will lay out the long-term product and financial roadmap at the Investor Day on 30 Sep 2026.

8. Competitive Landscape

EDA is effectively a three-player market (Synopsys, Cadence, Siemens EDA), with Ansys's simulation franchise adding Keysight and others as adjacent competitors. Market caps below were checked against live sources in early July 2026.

Peer	Market cap (Jul 2026)	Key 2025 metric
Cadence Design Systems (NASDAQ: CDNS)	≈$102.7bn (24 Jun 2026)	FY2025 revenue $5.297bn, +14.1% YoY; FY2026 outlook raised to $6.125–6.225bn (+17%)
Siemens AG — Siemens EDA (ETR: SIE)	≈$214bn (group, early Jul 2026)	EDA sits inside Digital Industries Software; Siemens reported double-digit EDA and simulation growth in FY2025–Q1 FY2026
Keysight Technologies (NYSE: KEYS)	≈$57.4bn (2 Jul 2026)	FY2025 revenue $5.37bn (+8% YoY), GAAP net income $846m — competes with Ansys in simulation/test of electronic systems

Synopsys is the largest pure-play by revenue (FY2025 $7.05bn including ~3.5 months of Ansys; FY2026 guided ~$9.67bn). Cadence remains the closest direct competitor across digital and analog EDA flows; Siemens EDA is strongest in physical verification and emulation; Keysight and Ansys overlap in simulation for RF, signal integrity and systems engineering.

9. Leadership & Ownership

Sassine Ghazi has been President and CEO since January 2024, having joined Synopsys in 1998; he led the Ansys acquisition and the current silicon-to-systems strategy. CFO Shelagh Glaser joined from Intel in 2021. Under the 27 May 2026 cooperation agreement with Elliott Investment Management, Elliott partner Jesse Cohn joined the board as an independent director effective 1 Jun 2026. Recent Form 4 filings show routine, pre-planned selling by executives; no material insider buying was identified in 2026.

Name	Date	Type	Shares	Price	Value	Plan Type
Sassine Ghazi (President & CEO)	15 Jun 2026	Sale (following option/RSU exercise of 17,913 shares)	14,603	$458.96 (weighted avg)	≈$6.70m	Rule 10b5-1 (adopted 19 Sep 2025)
Shelagh Glaser (CFO)	12 Jun 2026	Sale	3,394	$450.02 (weighted avg)	≈$1.53m	Rule 10b5-1 (adopted 13 Jan 2026)

Both transactions were executed under pre-arranged Rule 10b5-1 trading plans. Beyond these routine plan sales there were no material insider transactions identified in recent months, and no open-market insider purchases were found in 2026 Form 4 filings.

10. Risks

• Integration (Operational): The Ansys merger is the largest in EDA history; failure to realise expected synergies, cultural integration problems or disruption to Ansys's channel-partner model (which already triggered a $60m accounting change in FY2026) would undermine the investment case.
• Leverage (Financial): $10.0bn of long-term debt at 30 Apr 2026 and ~$0.5bn of annualised net interest expense reduce flexibility; deleveraging depends on sustaining ~$2bn+ annual free cash flow while also funding buybacks.
• Export controls and China (Regulatory): Financial targets assume no further changes to US export restrictions or Entity List rules; EDA software has been a direct instrument of US-China technology policy, and new restrictions could remove revenue with little warning.
• Customer concentration and cyclicality (Market): Synopsys depends on a relatively small number of large semiconductor customers whose R&D budgets follow the chip cycle; consolidation among customers is a stated risk factor, and any AI-capex slowdown would hit the entire tool chain.
• Competition (Competitive): Cadence is growing faster in some periods (FY2026 outlook +17%), Siemens EDA is investing aggressively, and AI-native design startups could compress the value of traditional tool licences over time.
• Restructuring execution (Operational): The FY2026 programme (guided $200–250m of charges, ~10% headcount reduction) and multiple simultaneous divestitures create execution and morale risk while the company integrates its largest-ever acquisition.

11. Recent Developments

• 14 Jan 2026 — Processor IP business sold to GlobalFoundries. Synopsys entered a definitive agreement to divest its Processor IP Solutions business, sharpening focus on interface and foundation IP and AI-driven opportunities; the FY2026 revenue guide absorbs a ~$40m impact from the impending close.
• 23 Mar 2026 — Elliott Management builds multibillion-dollar stake. Shares rallied after reports that the activist had accumulated a large position to push for improved profitability and execution following the Ansys deal.
• 27 May 2026 — Q2 FY2026 results beat; full-year guidance raised. Revenue of $2.276bn (vs $1.604bn a year earlier) and non-GAAP EPS of $3.35 both exceeded guidance; FY2026 revenue guidance rose to $9.665bn at the midpoint and non-GAAP EPS guidance to $14.76, with free cash flow guided to ~$2.0bn. Shares dipped on the day despite the beat.
• 27 May 2026 — Cooperation agreement with Elliott; Jesse Cohn joins board. Synopsys appointed Elliott's Jesse Cohn as an independent director effective 1 Jun 2026 under a formal cooperation agreement, and announced a 30 Sep 2026 Investor Day to present long-term financial targets.
• 12–15 Jun 2026 — Routine insider plan sales. CEO Sassine Ghazi and CFO Shelagh Glaser executed pre-planned Rule 10b5-1 sales (≈$6.7m and ≈$1.5m respectively) — see Section 9.

12. Key Dates

• 31 Jul 2026 — end of Q3 FY2026 (guidance: revenue $2,410–2,460m, non-GAAP EPS $3.63–3.69)
• Expected September 2026 — Q3 FY2026 results (Synopsys reported fiscal Q3 in early September in recent years; date to be confirmed)
• 30 Sep 2026 — Investor Day: management to present long-term financial targets and silicon-to-systems strategy
• 31 Oct 2026 — fiscal year 2026 ends (guidance: revenue $9,625–9,705m, non-GAAP EPS $14.72–14.80, FCF ~$2.0bn)
• Expected December 2026 — Q4 and full-year FY2026 results and initial FY2027 targets

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Disclaimer: This research is produced by ChartsView for educational and informational purposes only. It does not constitute financial advice or a recommendation to buy or sell any security. All information is sourced from publicly available company filings, press releases, and official data. ChartsView does not use analyst opinions or third-party ratings. Always conduct your own due diligence and consider your personal financial situation before making investment decisions. Past performance is not indicative of future results.

See also: Technical analysis on Atlassian · Atlassian company tracker

Last Updated: 8 July 2026

Atlassian Corporation (NASDAQ: TEAM) makes team collaboration and productivity software — Jira, Confluence, Jira Service Management, Loom, Trello, Bitbucket and the Rovo AI platform — used by more than 350,000 customers, including over 85% of the Fortune 500. The business is growing fast (Q3 FY2026 revenue rose 32% year-over-year to $1.79 billion) and generates well over a billion dollars of annual free cash flow, yet the shares have collapsed to around $85 from a 52-week high of $222.59, as the market debates whether AI agents will disrupt seat-based software pricing. Fiscal 2026 has brought a $1.2 billion quarter of acquisitions, a new CFO, a 10% workforce reduction to self-fund AI investment, and a heavy restructuring charge. This report sets out the facts from primary sources — company press releases and SEC filings — with no analyst opinions.

1. Company Snapshot

Field	Value
Company	Atlassian Corporation
Ticker / Exchange	TEAM / NASDAQ
Headquarters	San Francisco, USA ("TEAM Anywhere" distributed-first workforce); founded in Sydney, Australia
Founded	2002 (by Mike Cannon-Brookes and Scott Farquhar)
CEO	Mike Cannon-Brookes (co-founder)
CFO	James Chuong (since 30 Mar 2026; formerly CFO of LinkedIn)
Employees	≈14,000+ after the March 2026 restructuring, which cut roughly 10% of the workforce (~1,600 roles)
Market cap	≈$21.3bn (early Jul 2026; shares ≈$84.72 on 2 Jul 2026)
Revenue (FY2025, ended 30 Jun 2025)	$5,215.3m (+19.7% YoY)
Net income (FY2025, GAAP)	Net loss of $256.7m (−$0.98 per diluted share); non-GAAP net income $975.9m ($3.68/share)
Fiscal year end	30 June
Sector	Technology — collaboration, work management and enterprise service management software
Customers	350,000+; 55,913 customers with >$10,000 Cloud ARR (+10% YoY at 31 Mar 2026)

2. Bull & Bear Case

Bull Case

• Growth is accelerating, not slowing: Q3 FY2026 revenue rose 32% year-over-year to $1,787m with Cloud revenue accelerating to +29%, and remaining performance obligations up 37% to $3,996m as customers sign bigger, longer-term commitments.
• AI is being monetised on the platform: Rovo passed 5 million monthly active users in Q2 FY2026; agent orchestration in Jira, Rovo Dev, Rovo Service (GA) and the MCP partner gallery embed paid AI agents directly into customer workflows, and Service Collection ARR passed $1bn growing 30%+.
• Strong cash economics under the GAAP losses: Trailing-twelve-month free cash flow is ≈$1.2bn (Q3 FY2026 FCF alone was $561m, a 31% margin), funding $1.44bn of buybacks in the first nine months of FY2026 with only ~$0.99bn of debt.
• Enterprise land-and-expand is working: 55,913 customers now spend over $10,000 a year on Cloud (+10% YoY), Jira Service Management is used by more than half of the Fortune 500, and non-GAAP operating margin hit 34% in Q3 FY2026 (vs 26% a year earlier).
• Valuation has reset hard: At ≈$84.72 the stock is ~62% below its 52-week high, trading at roughly 3.4x trailing sales and ~17x trailing non-GAAP EPS — multiples far below its own history — while revenue still compounds at 20%+.

Bear Case

• AI could disrupt seat-based pricing: The share-price collapse reflects a market fear that AI agents will reduce the number of human seats that products like Jira and Confluence are priced on; if agents substitute for users faster than Atlassian monetises them, the growth model erodes.
• Persistent GAAP losses and heavy dilution: Atlassian has never reported an annual GAAP profit as a US-domiciled company — FY2025's net loss was $256.7m — and stock-based compensation ran at $1.21bn in just nine months of FY2026, an enormous recurring transfer to employees.
• Restructuring and leadership churn: In FY2026 the company cut ~10% of staff (a $223.8m Q3 charge, guided to $225–236m plus $62m+ of lease costs), changed CFO (Binz to Chuong), and lost President Anu Bharadwaj — execution risk while pivoting to AI is real.
• Guidance implies deceleration: Q4 FY2026 revenue is guided to $1,653–1,661m with Cloud growth of ~25.5% (vs 29% in Q3) and Data Center growth slowing to ~8.5% as the migration tailwind fades; full-year GAAP operating margin is guided at (2.0)%.
• Deep-pocketed competition: Microsoft (GitHub, Azure DevOps, Teams/Planner), ServiceNow in service management, and fast-moving AI-native startups all target Atlassian's core workflows.

3. Business Segments

Atlassian reports one operating segment but discloses revenue by deployment option. Figures below are the first nine months of FY2026 (ended 31 Mar 2026).

Segment	% of revenue	What it is
Cloud	66.5% ($3,197.2m, 9M FY2026; +26.9% YoY)	SaaS subscriptions to Jira, Confluence, Jira Service Management, Loom, Rovo and the Teamwork/Service/Strategy Collections, hosted on Atlassian's cloud platform. The strategic growth engine and the delivery vehicle for AI features.
Data Center	28.5% ($1,369.0m, 9M FY2026; +26.0% YoY)	Self-managed, subscription-licensed versions of the core products for large customers not yet on cloud; Q3 FY2026 growth was boosted by bigger, longer-term commitments, but Q4 growth is guided to ~8.5% as migration to Cloud continues.
Marketplace and other	5.0% ($239.7m, 9M FY2026)	Atlassian's cut of third-party app sales on the Atlassian Marketplace, plus premier support and services.

4. Business Model & Strategy

How Atlassian makes money. Almost all revenue (95%+) is subscription: per-seat SaaS plans in Cloud and annual term licences in Data Center, sold at low cost through a famously efficient flywheel — self-serve online sales, a partner channel and an expanding enterprise sales force. Subscription revenue was $4,581.0m in the first nine months of FY2026, up 27% year-over-year. Customers land on one product and expand across the "Atlassian System of Work"; the company now packages products into Collections (Teamwork, Service, Strategy) to raise average spend.

Unit economics. Non-GAAP gross margin runs at ~88% and Q3 FY2026 non-GAAP operating margin was 34%, while GAAP margins remain negative because of stock-based compensation (~25 points of margin) and, in FY2026, restructuring. Free cash flow margin was 31% in Q3 FY2026. The March 2026 restructuring is explicitly designed, in the company's words, to accelerate the path to GAAP profitability and self-fund AI and enterprise sales investment; FY2026 Q4 GAAP operating margin is guided positive at ~4.5%.

Moat and strategy. Atlassian's moat is workflow lock-in and its Teamwork Graph — two decades of structured data about how organisations plan, build and support work — now feeding Rovo AI agents. The three stated strategic priorities are Enterprise, AI and the System of Work. The $610m acquisition of The Browser Company (Oct 2025) added the AI-powered Dia browser as a front-end bet on how knowledge work will be done, and the expanded Google Cloud partnership brings Gemini models into Rovo at enterprise scale.

5. Financial Health

Figures from Atlassian press releases and SEC filings. FY2021–FY2022 were reported under IFRS while Atlassian was a UK-domiciled plc; from FY2023 the company reports under US GAAP following its US re-domiciliation¹. Atlassian has never paid a dividend. Fiscal years end 30 June.

Fiscal Year	Revenue	YoY %	GAAP EPS	Adjusted EPS	Dividend/share	Long-term debt (YE)
FY2021¹	$2.1bn	+29%	$(2.79)	$1.40	Nil	—
FY2022¹	$2,802.9m	+34%	$(2.42)	$1.69	Nil	—
FY2023	$3,534.6m	+26.1%	$(1.90)	$1.92	Nil	—
FY2024	$4,358.6m	+23.3%	$(1.16)	$2.93	Nil	$985.9m
FY2025	$5,215.3m	+19.7%	$(0.98)	$3.68	Nil	$987.7m

¹ FY2021–FY2022 figures are as reported under IFRS (Adjusted EPS = non-IFRS diluted EPS); GAAP EPS shown for those years is the IFRS diluted loss per share. The recurring GAAP/IFRS losses are driven overwhelmingly by stock-based compensation ($1,362.2m expensed in FY2025 alone), not by cash burn — FY2025 operating cash flow was $1,460.4m.

Quarterly detail (most recent first; FY2026 is in progress — the FY2025 total is shown in bold):

Quarter	Revenue	Adjusted EPS	GAAP EPS
Q3 FY2026 (ended 31 Mar 2026)	$1,787.0m	$1.75	$(0.38)
Q2 FY2026 (ended 31 Dec 2025)	$1,586.3m	$1.22	$(0.16)
Q1 FY2026 (ended 30 Sep 2025)	$1,432.6m	$1.04	$(0.20)
Q4 FY2025 (ended 30 Jun 2025)	$1,384.3m	$0.98	$(0.09)
FY2025 total	$5,215.3m	$3.68	$(0.98)

Q3 FY2026 GAAP EPS includes an $0.85/share hit from the $223.8m restructuring charge. Balance sheet (31 Mar 2026): cash and cash equivalents $1,136.3m (marketable securities nil after funding acquisitions and buybacks); long-term debt $989.1m (senior notes); total stockholders' equity $879.0m. Nine-month FY2026 cash flows: operating cash flow $874.0m, capex $29.6m, free cash flow $844.4m, depreciation and amortisation $101.2m, $1,228.9m spent on acquisitions and $1,441.2m on share repurchases.

6. Valuation

Raw metrics, July 2026. Not opinions on whether the stock is cheap or expensive.

Metric	Value
Market cap	≈$21.3bn (early Jul 2026; shares ≈$84.72 on 2 Jul 2026)
Enterprise value	≈$21.2bn (market cap ≈$21.3bn + long-term debt ≈$0.99bn − cash ≈$1.14bn, per 31 Mar 2026 balance sheet; marketable securities were nil)
Trailing P/E (GAAP)	n/m — loss-making (TTM GAAP net loss ≈$217m: Q4 FY2025 −$23.9m plus 9M FY2026 −$192.9m, the latter including $279.5m of restructuring charges); TTM non-GAAP EPS of $4.98 implies ≈17x
P/E (forward)	n/a — Atlassian guides revenue and margins, not EPS; the trailing non-GAAP figure of $4.98/share is the nearest published earnings anchor (≈17x at $84.72)
P/S (TTM)	≈3.4x (market cap ≈$21.3bn / TTM revenue ≈$6.19bn = Q4 FY2025 $1,384.3m + 9M FY2026 $4,805.8m)
EV/EBITDA (TTM)	n/m on a GAAP basis — TTM GAAP EBITDA is ≈−$105m (TTM operating loss ≈−$229m + TTM D&A ≈$124m per cash flow statements), depressed by ~$1.6bn of SBC and $279.5m restructuring; on company-adjusted (non-GAAP) operating income plus D&A, adjusted EBITDA is ≈$1.82bn, putting EV/adjusted EBITDA at ≈12x
P/FCF	≈18x (market cap ≈$21.3bn / TTM FCF ≈$1.20bn; FCF = TTM operating CF ≈$1.25bn − TTM capex ≈$45m: Q4 FY2025 OCF $375.3m − capex $15.0m, plus 9M FY2026 OCF $874.0m − capex $29.6m)
52-week high	$222.59
52-week low	$56.01
Short interest (% of float)	≈6.7% of shares outstanding sold short (17.05m shares, mid-Jun 2026 settlement data)
Days to cover	≈1.7 (average daily volume ≈5.8m shares)

7. What Are They Building?

Atlassian is rebuilding its platform around AI agents working alongside humans. Recent product announcements (all from FY2026 company releases): agent orchestration in Jira, letting teams assign work directly to Rovo and third-party AI agents with full permissions, audit trails and admin governance; Rovo Dev in Jira, a context-aware coding agent that takes on security fixes, migrations and feature-flag clean-ups with human approval before anything ships; Rovo Service (now generally available), a human-supervised support agent that routes, answers and acts on employee tickets; Remix in Confluence, converting pages into charts, infographics and presentations; and an expanded MCP gallery connecting Rovo agents to Amplitude, Box, Canva, Figma, GitHub, Intercom, New Relic and more.

Underlying all of it is the Teamwork Graph — Atlassian's proprietary map of an organisation's work, knowledge and goals — which management positions as the durable data advantage feeding every agent. The expanded Google Cloud partnership adds Gemini 3 Flash to Atlassian's open, multi-model AI strategy, and the $610m acquisition of The Browser Company (Dia and Arc browsers, completed 21 Oct 2025) is a bet on owning an AI-native front door to knowledge work. Rovo passed 5 million monthly active users in the December 2025 quarter, and Service Collection — the AI-heavy ITSM/ESM bundle — crossed $1bn of ARR growing more than 30% year-over-year.

8. Competitive Landscape

Atlassian competes across several software categories: work management, DevOps, enterprise service management and, increasingly, AI agents for knowledge work. Market caps below were checked against live sources in early July 2026 — note how brutally the work-management cohort has de-rated.

Peer	Market cap (Jul 2026)	Key 2025 metric
ServiceNow (NYSE: NOW)	≈$102.4bn	FY2025 subscription revenue $12.883bn, +21% YoY — the enterprise service-management heavyweight Atlassian undercuts with Jira Service Management
monday.com (NASDAQ: MNDY)	≈$4.2bn	FY2025 revenue $1,232.0m, +27% YoY; GAAP net income $119m — closest pure-play work-management rival, also sharply de-rated
GitLab (NASDAQ: GTLB)	≈$5.4bn	FY2026 (ended 31 Jan 2026) revenue $955.2m, +26% YoY — DevOps platform competing with Jira/Bitbucket/Compass

Microsoft is the largest indirect competitor (GitHub, Azure DevOps, Planner and Copilot bundled into enterprise agreements) but is not separable as a peer line. Atlassian's relative advantages are its 350,000-customer installed base, the Teamwork Graph data asset and a distribution cost structure that supports ~88% non-GAAP gross margins.

9. Leadership & Ownership

Co-founder Mike Cannon-Brookes is CEO and Atlassian's largest shareholder; he and co-founder Scott Farquhar (who stepped back from the co-CEO role in 2024 and remains a board member and major holder) together control the company through supervoting Class B shares. James Chuong became CFO on 30 Mar 2026, joining from LinkedIn, after Joe Binz announced his retirement; President Anu Bharadwaj departed 31 Dec 2025. Google VP of Product Anil Sabharwal joined the board in the December 2025 quarter.

On insider dealings: the co-founders sell stock regularly under pre-arranged Rule 10b5-1 trading plans — for example, Cannon-Brookes reported multiple plan sales on 16 Dec 2025 at weighted-average prices around $159.88–$162.69 under a plan adopted 20 Feb 2025, and aggregate co-founder plan selling over the six months to February 2026 ran to roughly $134m each. These are routine, pre-scheduled diversification programmes; no material insider open-market buying and no unusual discretionary selling outside 10b5-1 plans were identified in recent Form 4 filings. The chief executive's economic alignment remains overwhelming via his multi-billion-dollar equity stake.

10. Risks

• AI seat-disruption (Structural): Atlassian charges per human seat; if AI agents shrink knowledge-work headcount or workflows migrate to AI-native tools, seat expansion — the core growth mechanism — could stall faster than agent-based monetisation (Rovo, Collections pricing) replaces it.
• Stock-based compensation and dilution (Financial): SBC ran at $1,362m in FY2025 and $1,211m in just nine months of FY2026 (~25% of revenue); buybacks currently offset dilution but consume most free cash flow.
• Persistent GAAP losses (Financial): The company has an accumulated deficit of $5.9bn and guides FY2026 GAAP operating margin at (2.0)%; a de-rated market now demands GAAP profitability that has yet to be demonstrated.
• Execution and leadership churn (Operational): A 10% workforce cut, a CFO change and the President's departure all landed within five months while the company re-architects its platform around AI — a heavy simultaneous change load.
• Competition (Competitive): Microsoft bundles rival tools into enterprise agreements at marginal cost; ServiceNow pushes down-market into service management; well-funded AI-native startups attack individual workflows.
• Data Center transition (Market): Data Center revenue growth is guided to slow to ~8.5% in Q4 FY2026 as the licence base migrates to Cloud; any pause in cloud migration or discounting pressure during conversion would hit reported growth.

11. Recent Developments

• 21 Oct 2025 — Completed $610m acquisition of The Browser Company. Atlassian closed its all-cash purchase of the maker of the Dia and Arc browsers, an AI-native browser bet announced on 4 Sep 2025.
• 5 Feb 2026 — Q2 FY2026: first $1bn Cloud quarter. Revenue rose 23% to $1,586.3m, Cloud revenue crossed $1bn (+26%), RPO jumped 44% to $3.8bn, the customer base passed 350,000 and Rovo surpassed 5 million monthly active users.
• 18 Feb 2026 — James Chuong appointed CFO. The LinkedIn CFO joined Atlassian effective 30 Mar 2026, succeeding the retiring Joe Binz.
• 11 Mar 2026 — Workforce reduced by ~10% (~1,600 roles). Atlassian announced a restructuring to rebalance resources, consolidate leases, accelerate the path to GAAP profitability and self-fund AI and enterprise-sales investment; over 900 of the cut roles were in R&D. Total charges guided at $225–236m plus $62m+ of lease costs.
• 30 Apr 2026 — Q3 FY2026 results: growth accelerated, stock still dipped. Revenue rose 32% to $1,787.0m, Cloud accelerated to +29%, RPO grew 37% to $3,996m and non-GAAP operating margin reached 34%; GAAP results absorbed the $223.8m restructuring charge, and the shares fell despite the beat as the AI-disruption debate dominated.

12. Key Dates

• Expected August 2026 — Q4 and full-year FY2026 results (consensus calendars estimate 6 Aug 2026, after market close; date to be confirmed by the company)
• Expected August 2026 — FY2027 initial financial targets, provided with the Q4 shareholder letter as in prior years
• Expected September 2026 — annual report (Form 10-K) filing for fiscal 2026
• Expected October 2026 — Q1 FY2027 results

Track TEAM price action on our Live Charts, check macro event risk on the Economic Calendar, and discuss this research in the ChartsView Forum.

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Disclaimer: This research is produced by ChartsView for educational and informational purposes only. It does not constitute financial advice or a recommendation to buy or sell any security. All information is sourced from publicly available company filings, press releases, and official data. ChartsView does not use analyst opinions or third-party ratings. Always conduct your own due diligence and consider your personal financial situation before making investment decisions. Past performance is not indicative of future results.

Last Updated: 5 July 2026

Qualcomm Incorporated (NASDAQ: QCOM) is the San Diego semiconductor and licensing group behind the Snapdragon platforms that power most premium Android smartphones, alongside fast-growing automotive and IoT chip franchises and a patent-licensing arm with margins most businesses can only dream of. Fiscal 2025 (ended 28 Sep 2025) delivered record revenue of $44.3bn, and the company has just laid out an aggressive push into AI data-centre silicon. This research reviews the numbers, the valuation and the risks. For live price action see our Live Charts, and check the Economic Calendar for upcoming events that move semiconductor stocks.

1. Company Snapshot

Field	Value
Company	Qualcomm Incorporated
Ticker / Exchange	QCOM / NASDAQ
Headquarters	San Diego, California, USA (founded 1985)
Sector	Technology — semiconductors and wireless licensing
CEO / Leadership	Cristiano Amon, President and Chief Executive Officer
Employees	~52,000
Market cap	~$185.8bn (3 Jul 2026, share price $176.25)
Revenue (net sales), FY2025	$44.28bn (year ended 28 Sep 2025), +14% year on year
Net income, FY2025	$5.54bn GAAP (depressed by a $5.7bn non-cash tax charge); $13.30bn non-GAAP
Dividend	$0.92 per quarter ($3.68 annualised, ~2.1% yield), raised from $0.89 in Mar 2026
Fiscal year end	Late September (52/53-week year; FY2026 ends 27 Sep 2026)

2. Bull & Bear Case

Bull Case

• Diversification is working: FY2025 automotive revenue grew 36% to $3.96bn and IoT 22% to $6.62bn, with combined growth of 27%; Q2 FY2026 automotive hit a record $1.33bn (+38%), steadily reducing dependence on handsets.
• Credible data-centre entry: The June 2026 Investor Day unveiled the Dragonfly server CPU/accelerator portfolio with Meta and Microsoft as anchor hyperscaler partners, a custom-silicon engagement shipping later in calendar 2026, and a target of more than $15bn of data-centre revenue by FY2029 within a $40bn non-handset ambition.
• Licensing cash machine: QTL earned $4.04bn of EBT on $5.58bn of revenue in FY2025 — a 72% margin annuity on 3G/4G/5G patents that funds R&D and shareholder returns through every handset cycle.
• Heavy capital returns: $12.6bn was returned in FY2025 ($8.8bn buybacks, $3.8bn dividends), another $5.4bn of stock was repurchased in H1 FY2026, a fresh $20bn authorisation was added in April 2026, and the dividend has been raised again to $0.92 a quarter.
• Undemanding rating for the growth on offer: At ~14.8x trailing non-GAAP earnings and ~14.5x free cash flow, QCOM trades far below AI-exposed semiconductor peers despite record revenue and a genuine data-centre option.

Bear Case

• Handset concentration and the Apple runway: Handsets were still $27.8bn (63%) of QCT revenue in FY2025 and fell 13% year on year in Q2 FY2026; Apple continues to migrate to in-house modems, removing a major customer over time.
• Memory-driven guidance cut: Q3 FY2026 guidance of $9.2–10.0bn revenue and $2.10–2.30 non-GAAP EPS is well below the prior-year quarter, as memory supply constraints and pricing hit demand from Chinese handset OEMs.
• China exposure: A significant share of revenue comes from Chinese OEMs amid US–China trade and national-security tensions, leaving Qualcomm hostage to both export policy and Beijing's willingness to favour local suppliers.
• Data-centre execution risk: Dragonfly pits Qualcomm against entrenched giants (NVIDIA, AMD, Broadcom, Arm-based custom silicon) and requires heavy investment — Q2 FY2026 R&D was already up 11% year on year — with revenue contribution not expected to be material before FY2027–28.
• Vertical integration and licensing attrition: Key customers (Apple, Samsung, Chinese OEMs) increasingly design their own silicon, and QTL renewal economics face perennial legal and regulatory challenge, threatening the group's highest-margin income stream.

3. Business Segments

Segment	% of revenue	What it is
QCT (Qualcomm CDMA Technologies)	~87% (FY2025: $38.4bn)	Semiconductors: Snapdragon SoCs and modems for handsets ($27.8bn), IoT/PC/XR chips ($6.6bn) and automotive digital-cockpit/ADAS platforms ($4.0bn)
QTL (Qualcomm Technology Licensing)	~13% (FY2025: $5.6bn)	Licensing of the 3G/4G/5G patent portfolio to device makers, at a 72% EBT margin
QSI (Qualcomm Strategic Initiatives)	<1%	Venture-style strategic investments, excluded from non-GAAP results

Within QCT in FY2025: handsets 72%, IoT 17% and automotive 10% of segment revenue — with automotive the fastest-growing stream for the third consecutive year.

4. Business Model & Moat

How it makes money. Qualcomm sells chips (QCT) and rents out its intellectual property (QTL). QCT designs Snapdragon processors and modems manufactured by foundry partners and sold to phone, car and device makers. QTL licenses the wireless patent portfolio to virtually every handset OEM on the planet, collecting royalties per device largely independent of whose chip is inside.

Unit economics. QCT produced a 30% EBT margin in FY2025 on $38.4bn of revenue; QTL's 72% EBT margin on $5.6bn makes it the profit ballast. Group operating income was $12.4bn (28% margin), operating cash flow $14.0bn, and capex only $1.2bn — a fabless model whose cash conversion funds $12bn-plus of annual shareholder returns.

The moat. Three reinforcing layers: the deepest cellular patent estate in the industry (a legal toll-booth on 5G), premium-tier performance leadership in Snapdragon and the Oryon CPU architecture, and decade-long design-win pipelines in automotive (cockpit and ADAS sockets are sticky for a vehicle generation). The moat is narrower in data centre, where Qualcomm is the challenger, not the incumbent.

Capital allocation. Balanced and shareholder-friendly: FY2025 saw $8.8bn of buybacks and $3.8bn of dividends against $12.8bn of free cash flow, while bolt-on M&A (Alphawave Semi for connectivity IP, completed Dec 2025; Modular for AI software, announced Jun 2026 at $3.92bn) is aimed squarely at the data-centre push. Long-term debt is a manageable $14.8bn against $9.8bn of cash and marketable securities.

5. Financial Health

All figures from Qualcomm's earnings releases and SEC filings (10-K/10-Q, US GAAP; fiscal years end late September). Adjusted EPS is the company's non-GAAP diluted EPS.

Fiscal Year	Revenue ($m)	YoY %	GAAP EPS	Adjusted EPS	Dividend/share	Long-term debt (YE, $m)
FY2021	33,566	+43%	7.87	8.54	$2.66	13,701
FY2022	44,200	+32%	11.37	12.53	$2.86	13,537
FY2023	35,820	−19%	6.42	8.43	$3.10	14,484
FY2024	38,962	+9%	8.97	10.22	$3.30	13,270
FY2025	44,284	+14%	5.01¹	12.03	$3.48	14,811

¹ FY2025 GAAP EPS includes a $5.7bn (−$5.19/share) non-cash charge to establish a valuation allowance against US deferred tax assets following the One Big Beautiful Bill Act; it was excluded from non-GAAP results — and was largely reversed as a $5.7bn GAAP tax benefit in Q2 FY2026 when Treasury guidance changed.

Quarter	Revenue ($m)	Adjusted EPS	GAAP EPS
Q2 FY2026 (Mar 2026)	10,599	2.65	6.88²
Q1 FY2026 (Dec 2025)	12,252	3.50	2.78
Q4 FY2025 (Sep 2025)	11,270	3.00	(2.89)¹
Q3 FY2025 (Jun 2025)	10,366	2.77	2.43
Q2 FY2025 (Mar 2025)	10,979	2.85	2.52
Q1 FY2025 (Dec 2024)	11,669	3.41	2.83
FY2025 total	44,284	12.03	5.01

² Q2 FY2026 GAAP EPS includes the +$5.33/share benefit from releasing the FY2025 tax valuation allowance. Q1 FY2026 revenue of $12,252m was a company record.

Balance-sheet and cash-flow picture: FY2025 operating cash flow was $14.0bn (up from $12.2bn) against capex of $1.2bn; H1 FY2026 operating cash flow was $7.4bn. At 29 Mar 2026 the group held $9.8bn of cash and marketable securities against $15.3bn of total debt ($14.8bn long-term, $0.5bn short-term) — modest net debt of roughly $5.5bn, or well under half a year of free cash flow. Inventories rose to $7.4bn (from $6.5bn in September) as the company navigates memory supply constraints, and goodwill increased to $14.3bn reflecting the Alphawave Semi acquisition.

6. Valuation

Raw metrics, July 2026. Not opinions on whether the stock is cheap or expensive.

Metric	Value
Market cap	~$185.8bn (~1,054m shares × $176.25, 3 Jul 2026)
Enterprise value	~$191.2bn (market cap ~$185.8bn + total debt ~$15.3bn − cash & marketable securities ~$9.8bn, per 29 Mar 2026 balance sheet)
Trailing P/E (GAAP)	~19.2x ($176.25 / TTM GAAP EPS $9.20) — distorted by tax items that cut Q4 FY2025 by $5.29/sh and boosted Q2 FY2026 by $5.33/sh; on TTM non-GAAP EPS of $11.92 the multiple is ~14.8x
P/E (forward)	n/a — Qualcomm guides only one quarter ahead (Q3 FY2026 non-GAAP EPS $2.10–2.30), and ChartsView does not use analyst estimates
P/S (TTM)	~4.2x (market cap ~$185.8bn / TTM revenue ~$44.5bn)
EV/EBITDA (TTM)	~13.7x (EV ~$191.2bn / FY2025 EBITDA ~$14.0bn; EBITDA = operating income $12,355m + D&A $1,602m per FY2025 cash flow statement)
P/FCF	~14.5x (market cap ~$185.8bn / FCF ~$12.8bn; FCF = FY2025 operating cash flow $14,012m − capex $1,192m)
52-week high	$259.92
52-week low	$121.99
Short interest (% of float)	~4.7% (~44.6m shares short, early Jul 2026)
Days to cover	~2.0

7. Growth Drivers

Four engines matter from here. First, automotive: the Snapdragon Digital Chassis design-win pipeline is converting into revenue at pace (+36% in FY2025, record quarters continuing into FY2026), with sockets that persist for entire vehicle generations. Second, the data-centre pivot: the Dragonfly portfolio unveiled at the 24 Jun 2026 Investor Day — including a 250-core Oryon-based server CPU — plus anchor agreements with Meta and Microsoft and a hyperscaler custom-silicon engagement shipping later in 2026, targets more than $15bn of revenue by FY2029; the Alphawave (connectivity IP) and Modular (AI software) acquisitions supply key building blocks. Third, on-device and edge AI: the shift toward AI agents running locally favours Snapdragon's performance-per-watt across phones, PCs (Snapdragon X series) and industrial IoT. Fourth, licensing durability: QTL's per-device royalties give direct participation in every 5G (and eventually 6G) device cycle regardless of chip vendor. Management's stated ambition is $40bn of non-handset revenue by FY2029 — roughly quadruple the FY2025 automotive-plus-IoT base.

8. Peer Comparison

Peer	Market cap (Jul 2026)	Key 2025 metric
NVIDIA (NASDAQ: NVDA)	~$4,719bn	TTM revenue ~$253.5bn — dominant AI accelerator incumbent Dragonfly must challenge
Broadcom (NASDAQ: AVGO)	~$1,715bn	TTM revenue ~$75.5bn — custom AI silicon and networking rival
Intel (NASDAQ: INTC)	~$604.9bn	TTM revenue ~$53.8bn — x86 server CPU incumbent
Texas Instruments (NASDAQ: TXN)	~$266.7bn	TTM revenue ~$18.4bn — analogue/embedded comparator on auto exposure
MediaTek (TWSE: 2454)	~TWD6,696bn (~US$215bn)	TTM revenue ~TWD591.8bn — closest direct rival in smartphone SoCs

The gap is stark: Qualcomm's ~$186bn market value is a fraction of the AI-levered peers despite comparable profitability to many of them — the market is pricing handset maturity and awaiting proof of data-centre execution.

9. Insider Activity

Name	Date	Type	Shares	Price	Value	Plan Type
Cristiano Amon (President & CEO)	05 May 2026	Sale (family trust, open market)	10,000	$185.00	~$1.85m	Rule 10b5-1 (adopted 12 Dec 2025)

The Chief Executive's sale was executed under a pre-arranged Rule 10b5-1 plan through his family trust, which retained 207,568 shares afterwards — routine diversification rather than a signal. Beyond scheduled equity-award vesting and plan sales, no material insider buying or selling has been disclosed in recent months.

10. Key Risks

• Customer concentration (Competitive): A small number of OEMs drive revenue; Apple's transition to in-house modems and Samsung's Exynos push can remove billions of high-margin handset revenue over the next few years.
• China & geopolitics (Macro): Chinese OEMs are a major revenue source while US export controls tighten and Beijing promotes domestic silicon; escalation on either side would hit QCT volumes and QTL royalties simultaneously.
• Memory-supply shock (Operational): Management's Q3 FY2026 guidance explicitly embeds demand destruction from memory shortages and pricing at Chinese handset customers; a prolonged squeeze would keep the handset business in decline for several quarters.
• Data-centre execution (Strategic): The Dragonfly programme demands sustained R&D and acquisition spend against NVIDIA, AMD, Broadcom and hyperscalers' own chips; slippage on the 2026–2027 shipment milestones would undermine the $15bn FY2029 target and the investment case built on it.
• Licensing-model challenge (Regulatory): QTL's royalty structure has faced antitrust and contract challenges for a decade; an adverse ruling or a major licensee renegotiation would directly hit the group's highest-margin earnings stream.
• Cyclicality (Financial): FY2023's 19% revenue drop shows how quickly handset demand can swing; inventories of $7.4bn at March 2026 add write-down risk if end-demand disappoints.

11. Recent Developments

• 18 Dec 2025 — Alphawave Semi acquisition completed. Qualcomm closed the ~$2.3bn purchase of the high-speed connectivity IP specialist, an essential piece of the data-centre silicon roadmap.
• 04 Feb 2026 — Record Q1 FY2026. Revenue of $12.3bn (+5%) and non-GAAP EPS of $3.50 were both all-time records, with QCT revenue of $10.6bn and automotive topping $1bn for a second straight quarter.
• 29 Apr 2026 — Q2 FY2026 in line, guidance cut, $20bn buyback. Revenue of $10.6bn and non-GAAP EPS of $2.65 met guidance, the board authorised a new $20bn repurchase programme, but Q3 guidance of $9.2–10.0bn embedded memory-supply constraints, with China handset demand expected to bottom in the quarter.
• 24 Jun 2026 — Investor Day: Dragonfly data-centre push. Qualcomm unveiled the Dragonfly server CPU and AI-accelerator portfolio (including a 250-core Oryon CPU), announced the $3.92bn acquisition of AI-software firm Modular, named Meta and Microsoft as anchor hyperscaler partners, and raised its FY2029 non-handset revenue target to $40bn including more than $15bn from data centre.
• 02 Jul 2026 — Post-event pullback. The shares fell around 5% as investors weighed the margin dilution and execution risk of the multi-year data-centre investment cycle against near-term handset softness.

12. Key Dates

• 29 Jul 2026 — Q3 FY2026 results (scheduled; earnings call 1:45pm PT)
• 27 Sep 2026 — Fiscal year 2026 ends (52-week year)
• 04 Nov 2026 — Q4 and full-year FY2026 results expected (prior-year cadence: reported 5 Nov 2025)

Quarterly dividends are typically declared in October, January, April and July with payment the following quarter. Discuss QCOM with other members on the ChartsView Forum, and track semiconductor-sector catalysts on our Economic Calendar.

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Disclaimer: This research is produced by ChartsView for educational and informational purposes only. It does not constitute financial advice or a recommendation to buy or sell any security. All information is sourced from publicly available company filings, press releases, and official data. ChartsView does not use analyst opinions or third-party ratings. Always conduct your own due diligence and consider your personal financial situation before making investment decisions. Past performance is not indicative of future results.

Last Updated: 4 July 2026

Paychex, Inc. (NASDAQ: PAYX) is one of the largest providers of human capital management (HCM) solutions in the United States, delivering payroll processing, HR outsourcing, employee benefits and insurance services to approximately 800,000 clients. The company pays roughly 1 in 11 US private-sector workers. Fiscal 2026 (ended 31 May 2026) was the first full year to include Paycor HCM, acquired in April 2025, and revenue grew 17% to $6.51 billion. This report presents the facts from primary sources — company press releases, SEC filings and official data — with no analyst opinions.

1. Company Snapshot

Field	Value
Company	Paychex, Inc.
Ticker / Exchange	PAYX / NASDAQ
Sector	Technology — Human Capital Management software and services
Headquarters	Rochester, New York, USA
CEO	John Gibson (President and Chief Executive Officer)
Employees	~19,000
Clients	~800,000 businesses; pays 1 in 11 US private-sector workers
Revenue (FY2026, ended 31 May 2026)	$6,512.0m (+17%)
Net income (FY2026)	$1,760.1m (GAAP); adjusted net income $1,984.8m
Market cap	~$36.5bn (2 Jul 2026, 355.6m shares at $102.71)
Dividend	$1.19/quarter ($4.76 annualised, ~4.6% yield); $4.43 paid during FY2026
Fiscal year end	31 May

2. Bull and Bear Case

Bull Case

• Scale and recurring revenue: Approximately 800,000 clients and payroll for 1 in 11 US private-sector workers give Paychex a highly recurring, diversified revenue base built on more than 50 years of workforce data.
• Paycor-powered upmarket expansion: FY2026 revenue grew 17% to $6.51bn with organic growth accelerating through the year; Paycor's upmarket client base lifts revenue per client and opens the mid-market segment.
• Best-in-class margins: Adjusted operating margin reached 43.2% in FY2026 (42.1% adjusted in Q4) and management has guided to approximately 44% for FY2027.
• Cash generation and shareholder returns: Operating cash flow was $2.56bn in FY2026; the company returned $2.2bn to shareholders ($1.59bn dividends plus $611.0m buybacks) and yields roughly 4.6% at the current price.
• AI differentiation: The WISE agentic AI engine launched in Q4 FY2026 across HCM platforms, leveraging patent-pending technology and one of the industry's largest proprietary HR datasets.

Bear Case

• Growth deceleration: FY2027 guidance calls for total revenue growth of only 5–6% as the Paycor acquisition is fully lapped, a sharp step down from FY2026's 17% headline growth.
• Interest-rate sensitivity: Interest on funds held for clients was $210.9m in FY2026 (+30%); FY2027 guidance of $195–205m implies a decline as rates ease, a direct profit headwind.
• SMB cyclicality: Revenue is tied to small- and medium-sized business employment and wage levels; a US labour-market downturn would directly reduce payroll volumes and PEO worksite employees.
• Competitive intensity: ADP, Workday, Gusto, Rippling and Paycom all compete across payroll and HCM; pricing pressure and technology-led disruption are persistent threats.
• Leverage and payout weight: Paycor added $4.6bn of borrowings, and dividends of $1.59bn consumed roughly 90% of FY2026 GAAP net income, leaving less flexibility if growth slows; the stock fell around a third over the past year as the market de-rated the shares.

3. Business Segments

Paychex reports revenue in three streams. Figures below are FY2026 (ended 31 May 2026) from the company's earnings release.

Segment	% of revenue	What it is
Management Solutions	~75% ($4,867.9m)	Payroll processing, tax administration, HR outsourcing, time and attendance, retirement services and the Paycor HCM software suite
PEO and Insurance Solutions	~22% ($1,433.2m)	Professional Employer Organization (co-employment) services and insurance agency solutions for SMBs
Interest on funds held for clients	~3% ($210.9m)	Interest earned on client payroll and tax funds held between collection and remittance ($4.83bn held at year end)

4. Business Model

How Paychex makes money. Paychex charges recurring per-employee, per-payroll-run and subscription fees for payroll, tax filing, HR administration, benefits and insurance services. Management Solutions revenue grows through client count, product penetration and price realisation, while PEO revenue scales with the number of worksite employees served under co-employment arrangements. A third stream — interest earned on the float of client funds held for payroll and tax remittance — adds high-margin income that varies with short-term interest rates and average balances.

Unit economics. The model is asset-light and heavily automated: FY2026 adjusted operating margin was 43.2%, and capital expenditure of $234.9m represented under 4% of revenue. Long-term client contracts, high switching costs around payroll data, and cross-selling of HR, retirement and insurance products drive revenue per client higher over time. Paycor's upmarket base raised average revenue per client in FY2026.

Moat. Scale (800,000 clients), regulatory complexity that SMBs outsource, one of the industry's largest proprietary HR datasets feeding the WISE AI engine, and a nationwide advisory salesforce form the competitive moat. The company anticipates filing its FY2026 Form 10-K before the end of July 2026.

5. Financial Health

All figures from Paychex earnings press releases and SEC filings (fiscal years end 31 May). FY2026 includes a full year of Paycor; FY2025 included roughly two months.

Fiscal Year	Revenue ($m)	YoY %	GAAP EPS	Adjusted EPS	Dividend/share	Long-term debt (YE, $m)
FY2022	$4,611.7m	+13.7%	$3.84	—¹	$2.77	$797.7m
FY2023	$5,007.1m	+8.6%	$4.30	$4.27	$3.26	$798.2m
FY2024	$5,278.3m	+5.4%	$4.67	$4.72	$3.65	$798.6m
FY2025	$5,571.7m	+5.6%	$4.58	$4.98	$4.02	$4,548.4m
FY2026	$6,512.0m	+16.9%	$4.89	$5.51	$4.43²	$4,556.1m

¹ Paychex did not report a non-GAAP adjusted EPS figure for FY2022. ² Cumulative dividends paid during FY2026 per the company's earnings release; the quarterly rate was raised 10% to $1.19 in April 2026. Long-term debt jumped in FY2025 because the company issued $4.2bn of corporate bonds to fund the Paycor acquisition; the $400m Senior Notes Series A matured and were repaid in March 2026.

Quarter	Revenue ($m)	Adjusted EPS	GAAP EPS
Q4 FY2026 (Mar–May 2026)	$1,605.5m	$1.32	$1.17
Q3 FY2026 (Dec 2025–Feb 2026)	$1,808.9m	$1.71	$1.56
Q2 FY2026 (Sep–Nov 2025)	$1,557.6m	$1.26	$1.10
Q1 FY2026 (Jun–Aug 2025)	$1,540.0m	$1.22	$1.06
FY2026 total	$6,512.0m	$5.51	$4.89

Balance sheet at 31 May 2026: cash, restricted cash and total corporate investments of $1.2bn; short- and long-term borrowings, net, of $4.6bn; stockholders' equity of $3.7bn. FY2026 operating cash flow was $2,556.7m, capital expenditure $234.9m, and depreciation and amortisation $442.6m. The company repurchased 5.6m shares for $611.0m and paid $1,589.6m in dividends during the year.

6. Valuation

Raw metrics, July 2026. Not opinions on whether the stock is cheap or expensive.

Metric	Value
Market cap	~$36.5bn (2 Jul 2026; 355.6m shares at $102.71)
Enterprise value	~$40.0bn (market cap ~$36.5bn + total borrowings $4,556.1m − cash and corporate investments $1,124.5m per 31 May 2026 balance sheet)
Trailing P/E (GAAP)	~21.0x ($102.71 / FY2026 GAAP EPS $4.89)
P/E (forward)	~17.2x (FY2027 adjusted EPS guided to grow 7–9% from $5.51, implying ~$5.90–$6.00)
P/S (TTM)	~5.6x (market cap ~$36.5bn / FY2026 revenue $6,512.0m)
EV/EBITDA (TTM)	~13.5x (EV ~$40.0bn / company-reported FY2026 EBITDA $2,959.6m; ~13.2x on adjusted EBITDA of $3,021.8m)
P/FCF	~15.7x (market cap ~$36.5bn / FCF ~$2,321.8m; FCF = operating cash flow $2,556.7m − capex $234.9m per FY2026 cash flow statement)
52-week high	$148.76
52-week low	$85.45
Short interest (% of float)	~5.7% (~20.4m shares short; MarketBeat/StockAnalysis, early July 2026)
Days to cover	~5.7 (average daily volume ~3.65m shares)

7. What Are They Building

Paychex's strategic investment is concentrated on two fronts. The first is agentic AI: in May 2026 the company announced WISE (Workforce Intelligence Strengthened by Expertise), an AI-powered intelligence engine embedded across its HCM platforms and internal operations. WISE uses patent-pending technology to unlock insights from unstructured data, enable proactive and autonomous task execution, and raise both employee productivity and client outcomes. It draws on one of the industry's largest proprietary HR datasets.

The second is upmarket expansion through Paycor. The April 2025 acquisition gave Paychex a modern mid-market HCM platform and an upmarket client base; management cited the successful integration as a key driver of FY2026's double-digit growth and expects Management Solutions revenue to grow 5–6% in FY2027 on an organic basis. Continued investment in technology, selling and marketing — funded by 43%+ adjusted operating margins — supports the roadmap, alongside ongoing product build-out in retirement services, insurance and HR advisory.

8. Competitive Landscape

Paychex competes across payroll, HCM software and PEO services. Market caps are as of the dates shown; each metric is from the peer's own reported results.

Peer	Market cap (Month Year)	Key 2025 metric
ADP (NASDAQ: ADP)	~$96.8bn (Jul 2026)	FY2025 (ended Jun 2025) revenue $20.6bn, +7%
Paycom Software (NYSE: PAYC)	~$6.5bn (Jul 2026)	2025 revenue $2,051.7m, +9.0%; adjusted EBITDA $882.3m
Paylocity (NASDAQ: PCTY)	~$5.8bn (Apr 2026)	FY2025 (ended Jun 2025) revenue $1,595.2m, +14%

ADP is the scale leader across payroll and HCM; Paycom and Paylocity compete on modern single-database software in the mid-market — the segment Paychex targets with Paycor. Workday, Gusto and Rippling also overlap in parts of the market. Paychex differentiates on its combined technology-plus-advisory model, PEO/insurance breadth and SMB distribution.

9. Leadership & Insider Activity

John Gibson is President and Chief Executive Officer. Recent Form 4 filings show only small, routine dispositions — there were no material insider purchases reported in recent months.

Name	Date	Type	Shares	Price	Value	Plan Type
Joseph Tucci (Director)	30 Jun 2026 (filed)	Sale (option exercise)	3,907	~$98.25 (wtd avg)	~$383,900	Open market
Adam Brooks Ante (SVP)	1 Jul 2026	Shares withheld for tax	2,678	$102.71	~$275,100	RSU vesting (not a sale)
Elizabeth Roaldsen (VP)	13 May 2026	Sale	459	$90.00	~$41,300	Open market

Aside from these routine dispositions and tax-withholding events, there were no material insider transactions reported in 2026 to date. Sources: SEC Form 4 filings via EDGAR/StockTitan, July 2026.

10. Key Risks

• Growth normalisation (Operational): With Paycor fully lapped, reported growth steps down to a guided 5–6% in FY2027; any integration slippage or client attrition from the combined base would pressure results further.
• Macro / SMB employment (Macro): Revenue depends on small-business hiring, wage levels and business formation; a US recession would reduce checks per client, worksite employees and new sales.
• Interest-rate sensitivity (Financial): Float income of $210.9m is guided down to $195–205m in FY2027; faster rate cuts would deepen this high-margin headwind.
• Competition (Competitive): ADP, Workday, Paycom, Paylocity, Gusto and Rippling compete on price and product; AI-native entrants could compress payroll economics over time.
• Regulatory and compliance (Regulatory): Payroll tax administration, PEO co-employment rules, data privacy and emerging AI regulation all carry compliance cost and litigation exposure.
• Data security (Technology): Paychex processes sensitive payroll and HR data for ~800,000 clients; a material breach or extended outage would carry direct financial and reputational cost.
• Insurance and PEO claims (Financial): Changes in health insurance and workers' compensation rates and underlying claim trends can compress PEO margins, as flagged in the company's own risk factors.

11. Recent Developments

• 30 Jun 2026 — Small Business Jobs Index improves for a fourth consecutive month. The Paychex Small Business Jobs Index showed broad-based job gains with hourly earnings growth below 3%, a supportive backdrop for payroll volumes.
• 24 Jun 2026 — FY2026 results: revenue +17% to $6.51bn. Q4 revenue rose 12% to $1.61bn with adjusted EPS of $1.32 (+11%); full-year adjusted EPS was $5.51 (+11%). FY2027 guidance: revenue +5–6%, adjusted operating margin ~44%, adjusted EPS +7–9%. The company returned $2.2bn to shareholders during FY2026.
• 22 Jun 2026 — Named one of America's Most Trustworthy Companies by Newsweek. Paychex was also included in Newsweek's America's Greatest Workplaces 2026.
• 19 May 2026 — WISE agentic AI platform announced. Workforce Intelligence Strengthened by Expertise (WISE) embeds context-aware intelligence, guidance and autonomous execution across Paychex's HCM platforms; it launched across the product suite in Q4 FY2026.
• 28 Apr 2026 — Quarterly dividend raised 10% to $1.19 per share. The increase lifted the annualised payout to $4.76 per share.

12. Key Dates & Catalysts

• Expected July 2026 — FY2026 Annual Report (Form 10-K) filing, anticipated before the end of July per the company's earnings release
• Expected August 2026 — next quarterly dividend of $1.19 per share (Paychex typically pays in August, November, February and May)
• Expected September 2026 — Q1 FY2027 earnings release (the prior-year Q1 was reported on 30 Sep 2025)
• Expected October 2026 — annual meeting of stockholders

Track PAYX alongside the wider market on our Live Charts, check upcoming macro events on the Economic Calendar, and discuss this research in the ChartsView Forum.

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Disclaimer: This research is produced by ChartsView for educational and informational purposes only. It does not constitute financial advice or a recommendation to buy or sell any security. All information is sourced from publicly available company filings, press releases, and official data. ChartsView does not use analyst opinions or third-party ratings. Always conduct your own due diligence and consider your personal financial situation before making investment decisions. Past performance is not indicative of future results.

Last Updated: 30 June 2026

NXP Semiconductors is one of the world’s largest automotive and industrial chipmakers, supplying microcontrollers, processors, analog and connectivity components for cars, factories, smartphones and communications networks. Headquartered in Eindhoven and listed on the Nasdaq, the company is emerging from a two-year automotive and industrial inventory downturn: revenue fell in both 2024 and 2025, but quarterly growth turned positive in late 2025 and accelerated to 12% in the first quarter of 2026. With roughly 58% of sales tied to automotive, NXP is a direct play on software-defined vehicles, electrification and the broader chip recovery. This report covers the snapshot, bull and bear case, end-market segments, business model, five years of financials, valuation, growth drivers, peers, insider activity, risks, recent developments and key dates.

1. Company Snapshot

Field	Value
Company	NXP Semiconductors N.V.
Ticker / Exchange	NASDAQ: NXPI
Sector	Technology — Semiconductors
CEO / Leadership	Rafael Sotomayor (President & Chief Executive Officer, since 2025; succeeded Kurt Sievers)
Employees	~32,169 (as of 31 December 2025)
Market cap	~$70 billion (late Jun 2026)
Share price	~$274 (late Jun 2026); 52-week range $183.00–$339.95 (record close $332.67 on 26 May 2026)
FY2025 revenue	$12,269 million (−2.7% YoY)
FY2025 net income (to stockholders)	$2,021 million
FY2025 GAAP diluted EPS	$7.95 (non-GAAP $11.81)
Most recent quarter	Q1 2026 (ended 29 Mar 2026): revenue $3,180m, +12%; GAAP EPS $4.43 (incl. ~$627m MEMS divestiture gain), non-GAAP $3.05
Dividend	$1.014 per share per quarter (~$4.06 annualised); yield ~1.5%

2. Bull & Bear Case

Bull Case

• Automotive leadership: NXP holds roughly a 30% share of automotive microcontrollers and is a top-tier automotive-semiconductor supplier. Content per vehicle is rising with software-defined vehicles, electrification, radar and battery management, giving structural growth above unit volumes.
• Cyclical recovery underway: After revenue fell in 2024 and 2025, growth turned positive (+7% in Q4 2025, +12% in Q1 2026), and management guided Q2 2026 revenue to $3.35–3.55 billion, implying 14–21% year-on-year growth as the inventory correction ends.
• Strong cash generation: FY2025 non-GAAP free cash flow was $2.43 billion (about 20% of revenue), funding $1.0 billion of dividends and continued buybacks; the dividend has grown to $1.014 per quarter.
• Portfolio sharpening: NXP has reshaped its portfolio toward edge intelligence and software-defined vehicles via acquisitions (Kinara in edge AI, TTTech Auto, Aviva Links) while divesting its MEMS sensors line, which closed in February 2026.
• Through-cycle margins: Even in the downturn, non-GAAP gross margin held around 57% and non-GAAP operating margin around 33%, evidence of pricing discipline and a favourable product mix.

Bear Case

• Automotive cyclicality: With ~58% of revenue in automotive and ~19% in industrial & IoT, NXP is highly exposed to vehicle-production and capital-spending cycles; FY2025 revenue still declined 2.7%.
• Leverage: Gross debt was about $12.2 billion against $3.3 billion of cash at year-end 2025 (net debt ~$9 billion) — materially more leveraged than several debt-light peers.
• China and trade exposure: Tariffs, export controls and rising domestic Chinese competition are persistent risks for a company with global automotive and industrial customers.
• Valuation after a sharp run: The shares ran to a record close of $332.67 in May 2026 before a roughly 7% single-day fall on 23 June 2026 in a sector-wide chip selloff; the stock still trades around 35x normalised trailing GAAP earnings.
• Noisy GAAP earnings: Large restructuring, purchase-accounting amortisation and one-off items (such as the ~$627m MEMS divestiture gain) make GAAP EPS volatile; FY2025 GAAP EPS fell to $7.95 from $9.73.

3. Business Segments

NXP reports revenue across four end markets. Automotive is by far the largest, followed by Industrial & IoT, Mobile and Communication Infrastructure & Other. The mix below is for full-year 2025.

Segment	% of revenue	What it is
Automotive	~58%	Microcontrollers, processors, radar, analog and connectivity for cars (~$7.1bn FY2025; flat YoY)
Industrial & IoT	~19%	Processors, connectivity and security for factories, smart homes and IoT devices (~$2.3bn; flat YoY)
Mobile	~13%	Secure mobile transactions, wallets and connectivity for smartphones (~$1.6bn; +6% YoY)
Communication Infrastructure & Other	~11%	RF power, network processing and other products (~$1.3bn; −24% YoY)

4. Business Model & Moat

How it makes money. NXP designs and sells semiconductors — microcontrollers, application processors, analog, RF, security and connectivity chips — primarily into automotive and industrial customers under long design-in cycles. It runs a hybrid manufacturing model, operating some of its own fabs while outsourcing leading-edge nodes to foundry partners, which keeps capital intensity moderate (FY2025 net capex was only $395 million against $2.82 billion of operating cash flow).

Unit economics and stickiness. Automotive and industrial chips are designed into platforms that ship for many years, creating long, sticky revenue streams and high switching costs once a part is qualified into a car or factory line. That design-win lock-in supports non-GAAP gross margins around 57% even through a demand downturn.

The moat. NXP’s advantages are its deep automotive relationships, a broad catalogue spanning processing, analog and connectivity, functional-safety and security expertise, and the scale to invest through cycles. Rising electronic content per vehicle — for software-defined vehicles, electrification and advanced driver assistance — is a multi-year tailwind that favours incumbents with qualified, safety-certified portfolios.

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5. Financial Health

NXP’s revenue peaked in 2023 and declined modestly through the 2024–2025 downturn before returning to growth. GAAP earnings are noisier than the underlying business because of restructuring, acquisition amortisation and one-off items, so the company also reports non-GAAP figures. The five-year trend below is from NXP’s results releases.

Fiscal Year	Revenue ($m)	YoY %	GAAP EPS	Adjusted EPS	Dividend / share	Long-term debt (YE)
FY2021	11,063	—	$6.79	—	$2.25	—
FY2022	13,205	+19.4%	$10.55	—	$3.38	—
FY2023	13,276	+0.5%	$10.70	—	$3.55	—
FY2024	12,614	−5.0%	$9.73	$13.09	$4.06	$10,354m
FY2025	12,269	−2.7%	$7.95	$11.81	$4.06	$10,972m

NXP’s gross debt has run at roughly $10–11 billion in recent years (long-term debt $10,972m at year-end 2025, plus $1,250m short-term), partly offset by $3.27 billion of cash. The quarterly trend below shows the most recent quarter first, with the full-year 2025 total in bold. Note the Q1 2026 GAAP figure includes a ~$627m gain on the MEMS sensors divestiture.

Quarter	Revenue	Adjusted EPS	GAAP EPS
Q1 2026	$3,180m	$3.05	$4.43
Q4 2025	$3,335m	$3.35	$1.79
Q3 2025	$3,173m	$3.11	$2.48
Q2 2025	$2,930m	$2.72	$1.75
Q1 2025	$2,835m	$2.64	$1.92
FY2025 total	$12,269m	$11.81	$7.95

6. Valuation

Raw metrics, June 2026. Not opinions on whether the stock is cheap or expensive.

Metric	Value
Market cap	~$70 billion (~$276 × ~254m shares, late Jun 2026)
Enterprise value	~$79 billion (market cap ~$70bn + total debt ~$12.22bn − cash ~$3.27bn per FY2025 balance sheet)
Trailing P/E (GAAP)	~26x (TTM GAAP EPS ~$10.46, inflated by a ~$627m MEMS divestiture gain in Q1 2026; ~35x excluding that one-off)
P/E (forward)	~20x (price ~$276 / forward non-GAAP EPS ~$14, based on Q1 2026 actual $3.05 and Q2 2026 guidance midpoint $3.51)
P/S (TTM)	~5.5x (market cap ~$70bn / TTM revenue ~$12.61bn)
EV/EBITDA (TTM)	~20x (EV ~$79bn / EBITDA ~$3.88bn; EBITDA = GAAP operating income $3.05bn + D&A $0.83bn; ~17x on NXP’s reported FY2025 adjusted EBITDA of $4.73bn)
P/FCF	~29x (market cap ~$70bn / FCF $2.43bn; FCF = FY2025 operating cash flow $2.82bn − net capex $0.40bn)
52-week high	$339.95
52-week low	$183.00
Short interest (% of float)	~4.4% of float (Feb 2026 settlement)
Days to cover	~2.4 days

7. Growth Drivers

NXP’s growth case rests on several pillars. First, rising automotive content: software-defined vehicles, electrification, radar, advanced driver assistance and battery management all increase the dollar value of NXP chips per car, independent of how many cars are built. Second, the cyclical recovery: with the auto and industrial inventory correction ending, NXP returned to double-digit growth in Q1 2026 and guided Q2 2026 to 14–21% year-on-year growth. Third, edge intelligence: the Kinara acquisition and an expanding processing portfolio position NXP for AI at the edge in cars, factories and IoT. Fourth, software-defined vehicle platforms via TTTech Auto and partnerships, which deepen NXP’s role in next-generation vehicle architectures. Finally, disciplined capital return: a growing dividend ($1.014 per quarter) plus buybacks, supported by roughly $2.4 billion of annual free cash flow.

8. Peer Comparison

NXP competes in automotive and industrial semiconductors against a concentrated set of large global suppliers. The table below shows approximate market caps and a 2025 reference metric for each.

Peer	Market cap (Jun 2026)	Key 2025 metric
Texas Instruments (TXN)	~$267 billion	World’s largest analog & embedded-processing supplier
Infineon Technologies (IFX)	~$120 billion	#1 in automotive semiconductors; ~14% auto-MCU share
STMicroelectronics (STM)	~$72 billion	~10.2% automotive-semiconductor share
Renesas Electronics	~$51 billion	~6.7% automotive-semiconductor share

For context, NXP itself holds roughly a 30% share of automotive microcontrollers, placing it among the leaders of this group.

9. Insider Activity & Ownership

President & Chief Executive Officer Rafael Sotomayor leads the company following Kurt Sievers’ retirement in 2025. Recent insider activity has consisted of routine sales by executive officers under pre-arranged Rule 10b5-1 trading plans rather than discretionary selling. There have been no material insider purchases reported in the period.

Name	Date	Type	Shares	Price	Value	Plan Type
Andrew Hardy (EVP, Chief Sales Officer)	23 Apr 2026	Sale	5,289	$235.00	~$1.24m	Rule 10b5-1
Christopher L. Jensen (EVP, Chief People Officer)	23 Apr 2026	Sale	4,576	$234.03	~$1.07m	Rule 10b5-1
Christopher L. Jensen (EVP, Chief People Officer)	01 Jun 2026	Sale	1,746	~$316.50	~$0.55m	Rule 10b5-1

10. Key Risks

• Cyclicality (Macro): Automotive and industrial semiconductor demand is cyclical; NXP revenue fell in both 2024 and 2025 and a stalled recovery would pressure earnings.
• End-market concentration (Operational): About 58% of revenue is automotive, tying results closely to global vehicle production and inventory behaviour.
• Leverage (Financial): Gross debt of ~$12.2 billion against ~$3.3 billion cash means interest and refinancing exposure that debt-light peers do not carry.
• Geopolitics and trade (Regulatory): Tariffs, export controls and Chinese domestic competition could disrupt supply chains and demand.
• Integration and execution (Operational): Absorbing acquisitions such as TTTech Auto and Kinara, and ramping new process nodes, carries execution risk.
• Competition (Operational): Infineon, STMicroelectronics, Renesas and Texas Instruments all compete hard in automotive and industrial chips.
• GAAP earnings volatility (Financial): Restructuring, purchase-accounting amortisation and one-off items distort reported profit and complicate valuation.

11. Recent Developments

• 28 Apr 2026 — Strong Q1 2026 results. Revenue rose 12% to $3.18 billion; GAAP EPS was $4.43 (including a ~$627m MEMS divestiture gain) and non-GAAP EPS $3.05, and the shares rallied sharply on the recovery signal.
• 11 Jun 2026 — Dividend declared. The board approved a second-quarter 2026 interim dividend of $1.014 per ordinary share.
• 23 Jun 2026 — Sector selloff. NXPI fell about 7.2% to $299.94 amid a broad semiconductor selloff sparked by a memory-market scare, despite no company-specific negative news.
• 10 Jun 2026 — Annual General Meeting. NXP held its annual meeting of shareholders in Eindhoven.
• 02 Feb 2026 — MEMS divestiture closed. NXP completed the sale of its MEMS sensors business line, the source of the ~$627m gain recognised in Q1 2026, sharpening focus on core automotive and industrial portfolios.

12. Key Dates

• 28 Jul 2026 — Q2 2026 results (scheduled)
• 11 Jun 2026 — Q2 2026 interim dividend declared ($1.014 per share)
• 10 Jun 2026 — Annual General Meeting of shareholders
• 28 Apr 2026 — Q1 2026 results released

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