Stock Analysis | Texas Instruments Outlook - A Cautionary Technical and Market Signal

Market Snapshot

Takeaway: Texas Instruments (TXN) is under pressure with technical indicators and market sentiment suggesting a weak outlook. Current position: bearish.

News Highlights

• McKinsey on Tariffs and Chip Supply Chains: New analysis highlights how U.S. tariff policies are reshaping supply chains, with potential ripple effects for semiconductor firms like Texas Instruments.
• ETF Outflows in Semiconductor Sector: The US Semiconductors ETF (SOXX) saw a massive $750M net outflow in May 2025, signaling broader sector concern.
• Japan-U.S. Cooperation on Rare Earths: Proposals for increased collaboration between Japan and the U.S. could impact semiconductor materials supply and trade dynamics in the long term.

Analyst Views & Fundamentals

The current analyst consensus is Neutral, with one analyst from Bank of America Securities giving a “Underperform” rating. The simple average rating is 3.00, while the performance-weighted rating is 0.00, highlighting significant inconsistency in expectations. Notably, this contrasts with the stock’s recent price drop of -8.80%.

Key fundamental factors and their model scores (based on internal diagnostic scores, 0-10 scale):

• Net Cash Flow from Operating Activities per Share (YoY): 5.14% – Internal score: 10.00 (strong growth)
• Net Profit Attributable to Parent Co. Shareholders / Net Profit: 99.47% – Internal score: 10.00 (very high alignment of profit and shareholder return)
• EV/EBIT: 136.78 – Internal score: 6.00 (moderate)
• Net Cash Flow from Operating Activities (YoY): 4.68% – Internal score: 8.00 (solid growth)
• Cash-UP: 0.86 – Internal score: 8.00 (positive liquidity)
• Interest Coverage Ratio (EBIT/Interest): 11.55% – Internal score: 7.00 (adequate coverage)
• Total Assets Turnover Ratio: 0.24 – Internal score: 8.00 (efficient asset use)
• Net Profit Attributable to Parent Co. Shareholders (YoY): 10.81% – Internal score: 7.00 (positive trend)
• Cash-MV: -0.34 – Internal score: 8.00 (slight negative cash valuation)

While fundamentals remain strong in terms of operating cash flow and profit alignment, the weak consensus and technical signals suggest caution is warranted.

Money-Flow Trends

Recent flow patterns show positive inflows at the block and extra-large levels, with a block inflow ratio of 0.5491 and an extra-large inflow ratio of 0.5755. However, small and medium retail flows are negative, with inflow ratios of 0.4964 and 0.4970 respectively.

This suggests that institutional investors are cautiously optimistic, while retail traders are pulling back. The overall fund flow score is 7.52 (good), but the mixed inflow pattern highlights diverging market sentiment between retail and big money.

Key Technical Signals

Texas Instruments is facing a weak technical outlook with the internal technical score at 2.75. Here’s a breakdown of the key signals:

• RSI Overbought – Internal diagnostic score: 1.00 (strong bearish signal)
• Bearish Engulfing – Internal diagnostic score: 1.15 (strong bearish signal)
• MACD Death Cross – Internal diagnostic score: 1.00 (bearish divergence)
• RSI Oversold – Internal diagnostic score: 8.14 (potential bullish reversal)

Recent chart patterns (from 2025-08-26 to 2025-09-05) include a RSI Oversold and MACD Death Cross, indicating a possible short-term bottoming process, but bearish trends dominate the technical setup.

Key Insight: The technical side is weak, with 4 bearish vs. 1 bullish indicators. It’s recommended to avoid entering or consider hedging until a clear reversal signal emerges.

Conclusion

Despite strong fundamentals and positive cash flow metrics, the technical and market sentiment indicators are bearish, with an internal technical score of 2.75 and a recent price drop of -8.80%. The analyst consensus is mixed, and while block investors remain positive, retail flows are pulling back.

Actionable Takeaway: Consider waiting for a clearer reversal signal before entering a long position. Keep an eye on RSI Oversold conditions and monitor earnings or macroeconomic developments for potential turning points.