Texas Instruments: Morgan Stanley Downgrades to Underweight, PT Decreases to $192.

Texas Instruments: Morgan Stanley Downgrades to Underweight, PT Decreases to $192.

Morgan Stanley has downgraded Texas Instruments Inc. (TXN) to an "Underweight" rating and reduced its price target (PT) to $192, citing concerns about the company's cyclical nature and potential headwinds in the automotive sector Texas Instruments Highlights Why Not All Chipmakers Ride the Same AI Wave^[1]. The downgrade comes amid a broader market shift in expectations for the technology sector, particularly in the wake of recent economic uncertainty.

Texas Instruments, a leading manufacturer of analog and embedded chips, has traditionally been less affected by the AI-driven growth seen in other chipmakers like NVIDIA Corp. Texas Instruments Highlights Why Not All Chipmakers Ride the Same AI Wave^[1]. The company's revenue growth in the trailing twelve months was a modest 2% compared to NVIDIA's explosive 71% growth, highlighting the different lanes these companies operate in Texas Instruments Highlights Why Not All Chipmakers Ride the Same AI Wave^[1]. While NVIDIA focuses on GPUs for data centers, Texas Instruments specializes in analog and embedded chips used in essential but cyclical sectors like automotive and consumer electronics Texas Instruments Highlights Why Not All Chipmakers Ride the Same AI Wave^[1].

The recent quarterly revenue growth of 14% for Texas Instruments was largely driven by manufacturers pulling forward demand to avoid tariffs Texas Instruments Highlights Why Not All Chipmakers Ride the Same AI Wave^[1]. However, the company's guidance for the upcoming quarter shows a slower growth rate, with revenue expected to range between $4.45 billion and $4.80 billion, an increase of only 8% year-over-year Texas Instruments Highlights Why Not All Chipmakers Ride the Same AI Wave^[1]. The automotive sector, which is the primary driver for the current quarter, remains a concern due to ongoing tariff issues Texas Instruments Highlights Why Not All Chipmakers Ride the Same AI Wave^[1].

Despite the recent downturn, Texas Instruments remains a profitable and shareholder-friendly company. Technical indicators suggest that the stock could be oversold, with the current price well below its 50-day simple moving average (SMA) and a relative strength indicator (RSI) around 36, indicating near oversold conditions Texas Instruments Highlights Why Not All Chipmakers Ride the Same AI Wave^[1]. If support holds at $180, investors could see a near-term recovery, with primary resistance areas around $200 and $210 Texas Instruments Highlights Why Not All Chipmakers Ride the Same AI Wave^[1].

Analysts remain bullish on Texas Instruments' data center business, with projections indicating that this segment could contribute 20% to the company's overall revenue by 2025 Texas Instruments (TXN) Sees Rapid Growth in Data Center Market^[2]. The one-year price target set by Wall Street analysts averages at $200.77, suggesting a potential upside of 9.11% from the current share price of $184.01 Texas Instruments (TXN) Sees Rapid Growth in Data Center Market^[2].

However, Morgan Stanley's downgrade highlights the risks associated with Texas Instruments' cyclical business model and the potential impact of ongoing economic uncertainty. Investors should carefully consider these factors when evaluating the company's stock.