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Key Stats for TXN Stock
- Price Change for TXN stock: -12%
- Current Share Price: $189
- 52-Week High: $222
- TXN Stock Price Target: $196
What Happened?
Texas Instruments (TXN) stock is down 9% despite delivering a solid second-quarter earnings beat, as investors focused on the company’s cautious third-quarter guidance that fell short of Wall Street expectations.
The analog chipmaker reported earnings of $1.41 per share, beating the $1.35 estimate, while revenue of $4.45 billion topped the $4.36 billion expected.
However, the company’s third-quarter outlook dampened investor enthusiasm. TXN forecasted earnings between $1.36 and $1.60 per share, with the midpoint below the $1.50 analyst estimate, and revenue guidance of $4.45-$4.8 billion came in below the expected $4.59 billion.
The mixed results reflect two key dynamics that CEO Haviv Ilan highlighted during the earnings call. First, the semiconductor cyclical recovery continues, with customer inventories remaining at low levels, which benefits TXN’s positioning.
Second, tariffs and geopolitical tensions are disrupting global supply chains, creating both challenges and opportunities for the company’s diverse manufacturing footprint.
TXN’s analog chip business, its largest segment, performed well, with revenue rising 18% to $3.5 billion, surpassing the estimated $3.39 billion.
TXN is seeing recovery across four of its five key end markets, with industrial joining personal electronics, enterprise systems, and communications equipment in showing growth momentum.
Automotive remains the laggard, though management expects it to eventually follow the typical cyclical pattern.
See analysts’ growth forecasts and price targets for TXN (It’s free!) >>>
What the Market Is Telling Us About TXN Stock
The decline in TXN stock suggests investors are more concerned about near-term execution than the fundamental recovery story.
Management’s cautious tone represents a shift from earlier in the year, when they expressed stronger confidence that the cyclical upturn would accelerate through 2025.
During the earnings call, Ilan acknowledged that the second quarter included some “pull-forward” demand, particularly from China customers who may have accelerated orders due to tariff uncertainties.
Industrial markets “ran hot” with upper-teens sequential growth, which management believes may have been artificially elevated by inventory building ahead of potential trade disruptions.
However, the underlying cyclical recovery appears intact. TXN continues to benefit from low customer inventories and short lead times, while the company’s terms business is growing, indicating healthy demand trends.
The caution appears focused on distinguishing between genuine end-market demand and tariff-driven inventory adjustments.
From a strategic perspective, TXN is well-positioned for the evolving geopolitical landscape. Its $60 billion investment in U.S. manufacturing capacity, praised by the Trump administration, gives it unique advantages as a “geopolitically dependable” supply becomes increasingly valued.
Although this opportunity has not yet fully materialized, management sees potential for market share gains as customers prioritize supply chain security.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
