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Valued at a market cap of $178.4 billion, Texas Instruments Incorporated (TXN) designs, manufactures, and sells semiconductors to electronics designers and manufacturers. The Dallas, Texas-based company develops analog, mixed-signal, and digital signal processing (DSP) integrated circuits and embedded processors.
Companies valued at $10 billion or more are typically classified as “large-cap stocks,” and TXN fits the label perfectly, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the semiconductors industry. TXN's strong manufacturing and technology foundation, including ownership of much of its manufacturing capacity, enables lower costs and greater supply chain control. This, along with a broad portfolio of approximately 80,000 products and extensive market channels allow the company to reach a wide range of customers and design projects, increasing sales opportunities and customer insight.
This tech giant is currently trading 11.1% below its 52-week high of $220.39, reached on Nov. 8, 2024. Shares of Texas Instruments have declined 1.6% over the past three months, outpacing the broader Technology Select Sector SPDR Fund’s (XLK) 2.6% decrease during the same time frame.
Moreover, in the longer term, TXN has rallied 20.2% over the past 52 weeks, outpacing XLK’s 10.2% return. On a YTD basis, shares of TXN are up 4.5%, compared to XLK’s 3% decline over the same time frame.
To confirm its recent bullish trend, TXN has been trading above its 50-day moving average since mid-February. However, it is trading below its 200-day moving average recently.
On Jan. 23, TXN released its Q4 earnings results. Shares of the company fell 7.5% the following day despite delivering better-than-expected Q4 net income of $1.30 per share and revenues of $4 billion. However, both the bottom-line and top-line figures declined by a notable 12.8% and 1.7%, respectively, from the year-ago quarter. The decline was primarily driven by weaker demand in its key industrial and automotive markets. Additionally, profitability was impacted by a 200-basis point contraction in gross margin and a 320 bps drop in operating margin year-over-year.
Looking ahead, for Q1 2025, TXN expects revenue between $3.7 billion and $4.1 billion, indicating a potential 3% sequential decline. This outlook reinforced concerns about ongoing short-term demand weakness and might have further dampened investor confidence.
Texas Instruments has lagged behind its rival, Analog Devices, Inc. (ADI), which gained 22.5% over the past 52 weeks and 8.3% on a YTD basis.
Looking at TXN’s recent outperformance compared to its broader sector, analysts remain moderately optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 30 analysts covering it, and the mean price target of $208.25 suggests a modest 6.3% premium to its current levels.
