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Why Texas Instruments’ 2026 Outlook Has Wall Street Re-Rating It

Written by Thomas Hughes

Texas Instruments (NASDAQ: TXN)is on track to break out of a long-term trading range, set a new high, and embark on a significant rally. The company’s Q4 2025 earnings releaseand 2026 outlook not only affirmed the recovery in analog semiconductor markets but also the importance of those markets with regard to AI.

This has resulted in a shift in analyst sentiment. Analysts were critical of Texas Instruments, driving price action negatively in 2025. Now, however, the narrative seems to have turned.

Price targets, which fell in 2025, are rising again. The January activity includes numerous updates, such as an upgrade to Hold by BNP Paribas and boosted price targets from Susquehanna and Stifel Nicolaus.

The consensus Hold rating is firming, the bias is modestly bullish, and price target revisions are leading the market.

While the broad consensus price target in late January assumes the stock is fairly valued near the middle of its trading range, future revisions may boost the target higher. Notably, the Street-high target of $225 would be sufficient to set a new all-time high if reached. 

Analysts Cautiously Optimistic Following Texas Instruments’ Earnings Update

Analysts are cautiously optimistic in the wake of Texas Instruments’ Q4 results and guidance update. While Q4 revenue and earnings were tepid relative to the consensus, performance was strong relative to the prior year.

Revenue grew by more than 10% in the quarter, driven by strength in most operating segments and all end markets. The critical Analog segment grew by 14%, followed by an 8% gain in Embedded Processing, all of which helped offset a 34% decline in Other. 

The Other segment is a concern; however, at 3.3% of total revenue, it has a minimal impact compared to the strength in the core groups.

Additionally, the company reorganized its reporting to include five end markets, and it showed growth across all of them.

Industrial, Automotive, and Data Centers (the growth pillars) grew by 12%, 6%, and 64%, respectively, to account for 75% of net revenue. Personal Electronics and Communications grew by 17% and 20%.

Margin news was also favorable, despite bottom-line results falling short of estimates. The company navigated margin pressures well, sustaining relative strength, and missing consensus by only 4 cents on a GAAP basis. GAAP results included an unexpected, non-cash impairment, leaving adjusted earnings above forecasts and sufficient to sustain future capital returns. 

Analysts Turn More Constructive After Texas Instruments’ Guidance Update

The market’s positive reaction following the release was likely not just due to earnings results, as the firm posted exceptionally strong guidance for future quarters. This guidance is why analysts overlooked the slim top- and bottom-line misses in Q4 and boosted their price targets.

The company guided Q1 revenue and earnings above consensus, indicating strengthening momentum in key markets, and there is potential for outperformance.

The Data Center segment, for one, is underpinned by a robust, industry-wide spending trend that has yet to peak. Texas Instruments’ significant contribution to the artificial intelligence industry lies in its focus on the base signal and electrical layers on which more advanced technologies are grounded. Vast buildouts in AI infrastructure are likely to drive this segment’s growth for many quarters to come. 

Texas Instruments Capital Return Drives Value for Investors

Texas Instruments’ capital return is attractive and grows annually. The company’s dividend is approximately 2.75% on an annualized basis as of late January 2026, and share buybacks reduce the count quarterly. The Q4 buyback activity resulted in a 0.9% year-over-year decline and 0.65% decline for the year, and a similar pace is expected in 2026.

The company has stated a commitment to shareholder returns, and both its earnings and free cash flow outlook are robust over the next five to 10 years.

The post-release price action is bullish. The market surged more than 7% in after-hours and premarket trading, approaching record highs. The moveextends a rebound that began in late 2025 and sets the market up for a significant rally. The technical indicators align in three time frames, daily, weekly and monthly, pointing to a bullish entry and sustained rally with many quarters to run.  READ THIS STORY ONLINE

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NextEra Energy: Priced for Perfection, or Justified Premium?

Written by Chris Markoch

Following a year that was generally good for utilities stocks, it is surprising that NextEra Energy Inc. (NYSE: NEE) is “only” up about 24% over the last 12 months. In fact, a significant amount of that growth has come in 2026. NEE stock is up 9.2% in the first month of the year, with about 3.7% of that growth coming after NextEra reported earnings on Jan. 27.

However, with NEE stock now trading at a 52-week high and trading at 27x earnings, a premium to itself and to the sector average, investors seem to be willing to ride a hot hand, rather than discounting real risk. For now, investors like the powerful growth story laid out by NextEra management.

Setting Up a Long-Duration Runway for Growth

In the company’s fourth quarter 2025 earnings report, NextEra described 2025 as another “execution year” in which earnings per share (EPS) increased over 8% to $3.71. Notably, that figure was above the upper end of the company’s guidance. This was driven by business growth in both of the company’s business units: Florida Power & Light and Energy Resources.

However, as with most earnings reports, investors were paying close attention to the future, not the past.

To that end, management reported that Florida Power & Light secured a four-year rate agreement with an allowed return on equity (ROE) midpoint of 10.95%. For investors, that means that NextEra’s plans to spend $90 to $100 billion on capital expenditures through 2032 are well supported.

For 2026, management reiterated its guidance for adjusted EPS between $3.92 and $4.02, explicitly targeting the high end of that range.

From that base, NextEra aims for at least 8% compound annual adjusted EPS growth through 2032 with operating cash flow growing at or above EPS.

NextEra Is Playing a Key Role in the Energy Transition

Future growth is also the story behind NextEra’s Energy Resources business, which reported adjusted earnings growth in 2025 of approximately 13%. The company also had another record year of renewables and storage origination, including a 13.5 GW backlog and a total development queue of approximately 30 GW.

The company noted that it is seeing solid demand from data centers and hyperscalers as a new “large-load” driver. That undoubtedly comes as a relief to investors who may have been concerned about lighter demand. It’s also a reason why many investors may be willing to pay a premium for NEE stock.

NEE Stock Is Stretched, Not Stressed

The NEE stock chart is consistent with a “riding the hot hand” setup, with price and momentum stretched but still confirming the uptrend. Momentum has pushed the stock price to the upper Bollinger Band while RSI runs in the mid‑70s. This combination can signal overbought conditions, but also often appears in strong, trend‑following phases rather than at immediate tops. 

The comparison is to last October, when NEE stock made a similar push to the top of its band with an overbought RSI cluster before breaking out to the upside. That prior pattern resolved with a brief pause and shallow pullback that reset momentum.

From there, NEE stock accelerated even higher, rewarding investors who continued to hold. Today’s setup looks comparable: expanding bands, a price above the midline, and rising volume suggest buyers remain in control, even if the move is getting crowded in the short term. 

From here, a consolidation phase, or a modest dip toward the 20‑day average, would be a typical digestion pattern before another attempt at new highs. In that sense, the chart supports the idea that investors are content to keep pressing what has been working, trusting that any near‑term cooling is a pause in an ongoing momentum run. READ THIS STORY ONLINE

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Carvana Drops 14% After $1B Accounting Allegations

Written by Jeffrey Neal Johnson

Carvana Co. (NYSE: CVNA) shares experienced extreme volatility in trading during the last days of January 2026. The stock dropped approximately 14%, trading near $408 per share and erasing a significant portion of its gains from earlier in the year. This sharp decline creates a confusing picture for investors because it came immediately after the company reported record-breaking third-quarter financial results.

The catalyst for this sell-off is a new report from short-selling firm Gotham City Research. The report alleges severe accounting irregularities and undisclosed financial dependencies between Carvana and its related corporate entities. This creates a classic battleground scenario for the stock. One side sees a company with rapidly improving fundamentals and cash flow, while the other sees complex accounting risks. Investors must now decide if this pullback represents a structural failure or a discounted buying opportunity.

Smoke and Mirrors? Analyzing the Accounting Claims

The core of the Gotham City Research report focuses on Carvana’s relationship with related companies controlled by the Garcia family. Ernest Garcia II, the father of Carvana CEO Ernest Garcia III, controls DriveTime Automotive Group and Bridgecrest. The report alleges that Carvana has overstated its earnings for the 2023 through 2024 period by more than $1 billion by using these entities to subsidize its operations.

A key part of this allegation involves a lesser-known entity called GoFi, LLC. Financial documents obtained for GoFi show that it generated nearly 100% of its revenue in 2024, specifically $7.1 million, from gains on the sale of finance receivables. This data point is critical to the short seller’s argument. It suggests that GoFi may exist primarily to move loans and capital between corporate entities rather than to operate as a standalone business.

Furthermore, the report challenges the market’s belief that DriveTime acts as a stable financial backstop for Carvana. DriveTime’s 2024 financial statements reveal a cash burn from operating activities of over $900 million between 2022 and 2024. Instead of generating surplus cash to support Carvana, DriveTime appears to be raising debt to fund its own operations.

The report also highlights discrepancies in loan valuations. Carvana generates profit by selling customer loans to third parties, known as Gain on Loan Sales. Gotham alleges that Carvana sells these loans to Bridgecrest at inflated values to book an immediate profit. Bridgecrest then allegedly marks down the value of those same assets by up to 15%, or by $900 million, in 2024. This process could effectively shift losses from Carvana’s public books to the private books of related parties.

Carvana refuted the allegations in an email statement, calling them “inaccurate and intentionally misleading.” The company also stated that all its “related-party transactions are accurately disclosed in our financial statements.”

Ignoring the Noise: Carvana’s Record Financials

Despite these serious allegations, Carvana’s defense remains solid. The company’s recent financial performance indicates it is in its strongest operational position ever. In its Q3 2025 earnings report, Carvana posted record revenue of $5.65 billion, a 55% increase year-over-year.

More importantly, the company achieved GAAP operating income of $552 million and Adjusted EBITDA of $637 million. This represents an 11.3% margin, a record for the company. These metrics suggest that the core business of buying and selling cars is generating real profit, regardless of the complex loan accounting.

The company has also significantly repaired its balance sheet, countering the bankruptcy fears that plagued it in previous years. Carvana ended the third quarter with strong liquidity metrics:

• Cash on Hand: Over $2.1 billion
• Debt Reduction: Retired approximately $1.2 billion in corporate debt over the last two years
• Leverage Ratio: Reduced to 1.5x, a level generally considered healthy for a growth company

Operational improvements are also visible to the consumer. The company has integrated the ADESA auction network it acquired in 2022. This integration has streamlined Carvana’s logistics in the retail automotive sector, enabling same-day or next-day delivery for 40% of sales in the Phoenix market. This physical efficiency is a tangible asset that critics cannot easily dispute.

The Smart Money Vote: Price Targets Head Higher

The reaction from Wall Street suggests that institutional investors are looking past the short-seller report. Immediately following the release of the Gotham report and the Q3 earnings, major analysts raised their price targets for Carvana stock.

JPMorgan maintained its Overweight rating and raised its price target to $510. Similarly, Wells Fargo raised its target to $525. These upgrades indicate that analysts view the related-party complexity as known noise.

They appear to be prioritizing the company’s visible ability to generate free cash flow and capture market share over the forensic accounting concerns raised by the short seller. When analysts raise price targets during a sell-off, it is often interpreted as a vote of confidence that the market reaction is exaggerated.

The Tail Risks: Auditors and Subpoenas

While the operational metrics are strong, significant risks remain. The Gotham report notes that Grant Thornton serves as the auditor for all three entities: Carvana, DriveTime, and GoFi. Critics argue this could represent a potential conflict of interest or a weakness in independent oversight, as the same firm is signing off on both sides of these related-party transactions.

Additionally, the report mentions an SEC subpoena from June 2025 regarding these exact issues. This is the biggest hard risk for investors. It moves the discussion from theoretical debates about accounting methods to potential legal consequences. If regulatory action forces a restatement of earnings or changes in business practices, the stock could face further pressure regardless of how many cars they sell.

Crisis or Opportunity? Weighing Risk Against Reward

Carvana remains a high-risk, high-reward investment. The stock trades at a high valuation multiple of over 90 times trailing earnings, which naturally invites high volatility. It is not a suitable holding for conservative investors who cannot stomach double-digit daily percentage moves.

However, for those with a higher tolerance for risk, the current drop presents a specific opportunity. The stock is trading in the $400 to $410 range, well below the recent 52-week high of $486 and the new analyst targets of over $500. If Carvana can clarify its accounting position regarding DriveTime and GoFi, and continue its operational growth into 2026, the market may quickly reprice the stock higher. The underlying retail machine is firing on all cylinders, but investors must be willing to weather the regulatory storm to capture the potential upside. READ THIS STORY ONLINE

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