Texas Instruments Incorporated (TXN): Jim Cramer Left Wishful – “Texan Is So Non-Promotional”

Jim Cramer’s recent remarks on Texas Instruments (TXN) have crystallized investor skepticism about the semiconductor giant’s strategic direction. Labeled a “relic” for its reliance on cyclical markets and failure to pivot to high-growth sectors, TXN’s stock has become a poster child for Cramer’s frustration with companies that prioritize stability over innovation. Let’s dissect why the “Texan” has left him—and many investors—wishful for change.

The Non-Promotional Stance: Why Cramer Calls TXN a “Relic”

Texas Instruments’ 70% revenue dependence on automotive and industrial markets has become a double-edged sword. While these segments are foundational to its analog and embedded processing expertise—think power management chips and microcontrollers—their cyclical nature leaves TXN vulnerable to macroeconomic downturns. Cramer argues this narrow focus has stifled growth, contrasting it with peers like Micron (MU), which diversified into AI-driven data center memory chips. “Texas Instruments doesn’t seem to care if you don’t like them,” Cramer quipped, highlighting the company’s lack of urgency to adapt to secular trends.

Financial Performance: Q4 Strength vs. Q1 Weakness

TXN’s Q4 2024 results were a bright spot: revenue rose to $4.1 billion, with analog revenue up 11% YoY. However, its Q1 2025 guidance sent shares plummeting over 7%. The EPS forecast of $0.94–$1.16 missed analyst estimates of $1.17, underscoring softness in embedded processing (stagnant revenue) and inventory overhang in automotive/industrial sectors.

This divergence highlights TXN’s cyclical struggles: while MU surged 45% in 2024 on AI demand, TXN’s stock fell 12% year-to-date as of early 2025.

Strategic Stagnation: A Missed Opportunity?

Cramer’s critique hinges on TXN’s refusal to evolve. Despite a $2.9 billion CHIPS Act grant to bolster U.S. semiconductor manufacturing, TXN remains fixated on its core markets. Meanwhile, peers like NVIDIA (NVDA) and AMD (AMD) are capturing AI-driven growth, leaving TXN’s analog prowess in the shadow of tech’s next big thing.

The company’s dividend—$0.48 per share quarterly—offers stability but lacks the growth allure of high-beta stocks. “Investors want returns, not relics,” Cramer emphasized, arguing that TXN’s valuation (near 52-week lows) reflects its strategic inertia.

Market Risks: Fed Policy and Geopolitical Headwinds

Texas Instruments’ fate is tied to two macro factors:
1. Federal Reserve Policy: A rate cut could boost industrial demand, but Cramer warns this is far from certain.
2. Trade Tensions: Geopolitical risks, including tariffs and supply chain disruptions, remain unresolved.

Analysts note that embedded processing revenue stagnation and weak end-market demand (e.g., automotive) could prolong the slump. Management’s cautious Q2 guidance ($4.17–$4.53 billion revenue) signals no quick turnaround.

Investor Sentiment: Why TXN Ranks Low on Cramer’s List

In Cramer’s recent rankings of tech stocks, TXN placed 1st—but not for praise. The designation came with a caveat: it ranked 13th among his discussed stocks for actionable buys. Cramer’s preference for AI-focused stocks (e.g., a unnamed stock up 25% in 2025) underscores TXN’s unappealing profile in a market obsessed with growth.

Even with Q3 2024 revenue growth of 14.38%, TXN’s reliance on cyclical markets leaves it lagging peers like ASML (ASML), up 30% in 2024 on AI/hyperscaler demand.

Conclusion: Is TXN Worth the Wait?

Jim Cramer’s verdict is clear: avoid TXN unless a buyout emerges (unlikely). The company’s operational strengths—$29.9 billion in 2024 revenue, analog leadership—can’t offset its strategic complacency. With shares down 3.47% since Cramer’s October 2024 critique and 0.19% over 12 months, investors are voting with their wallets.

The “non-promotional” tag isn’t just a quip—it’s a warning. Until Texas Instruments diversifies beyond cyclical markets, its stock will remain a relic of an older era, overshadowed by peers racing toward AI-driven futures.

Final Take: For growth-oriented investors, TXN is a pass. For those seeking defensive plays in industrials, tread carefully—its valuation may be cheap, but its stagnation risks outpacing rewards.

Data as of Q1 2025. Past performance does not guarantee future results.