Texas Instruments Outlook - A Deep Divergence Between Fundamentals and Technicals

Market Snapshot

Takeaway: Despite strong fundamentals, Texas Instruments (TXN) faces bearish technical signals, with the stock down 10.82% recently.

News Highlights

• McKinsey's Tariff Analysis – A recent report by McKinsey on U.S. tariffs highlights potential risks for the semiconductor sector, raising questions about how global policy could affect TXN’s supply chain.
• SOXX ETF Outflow – The US Semiconductors ETF (SOXX) saw a $750M outflow in May 2025, signaling reduced institutional interest in the sector, which could indirectly pressure TXN’s stock.
• Japan-U.S. Cooperation – Japan announced plans to propose stronger cooperation with the U.S. on rare earths and semiconductors, potentially reshaping the industry landscape, with TXN likely to benefit from long-term trade stability.

Analyst Views & Fundamentals

Analyst ratings for TXN show a mixed outlook. The simple average rating is 3.33, while the performance-weighted rating is 2.10, indicating that recent recommendations have leaned bearish or neutral.

• Analyst Consensus – Three analysts from three institutions issued ratings in the last 20 days: one 'Strong Buy', one 'Neutral', and one 'Sell'. This lack of consensus suggests uncertainty in the market.
• Rating vs. Price Trend – The recent price drop (-10.82%) aligns with the bearish weighted rating. Analysts with better historical performance, like Cody Acree (Benchmark), are bullish, but recent bearish calls from Morgan Stanley have pulled the average down.

Fundamental Highlights

• Net profit attributable to parent company shareholders / Net profit: 99.47% – Internal diagnostic score: 1.0
• EV/EBIT: 136.78 – Internal diagnostic score: 2.0
• Net cash flow from operating activities per share (YoY): 5.14% – Internal diagnostic score: 1.0
• Cost of sales ratio: 42.61% – Internal diagnostic score: 3.0
• Interest coverage ratio (EBIT / Interest): 11.55% – Internal diagnostic score: 3.0
• Total profit (YoY): 8.43% – Internal diagnostic score: 2.0
• Total assets turnover ratio: 24.18% – Internal diagnostic score: 3.0

Money-Flow Trends

Large institutional investors are currently net buyers of TXN. The block inflow ratio is 55.35%, suggesting that big-money players are accumulating positions. Meanwhile, retail investors are more divided: the overall inflow ratio is 54.40%, with large and extra-large investors showing the most positive sentiment. This contrast suggests a possible long-term confidence despite recent price weakness.

Key Technical Signals

Technically, TXN is in a weak position. The internal technical score is 2.98, and key indicators reinforce a bearish bias.

• WR Oversold: Internal diagnostic score: 2.32 – Neutral to rising, but with only a 45% win rate historically.
• Bearish Engulfing: Internal diagnostic score: 1.0 – Strongly bearish, with a poor historical win rate of just 25%.
• RSI Oversold: Internal diagnostic score: 5.61 – Suggests potential for a bounce, but still bearish in context.

Recent Chart Patterns (Last 5 Days):

• 2025-09-10: WR Oversold, Bearish Engulfing, RSI Oversold
• 2025-09-12: WR Oversold, RSI Oversold
• 2025-09-11: WR Oversold, RSI Oversold
• 2025-09-09: WR Oversold, RSI Oversold
• 2025-09-08: WR Oversold, Bearish Engulfing, RSI Oversold

The consistent appearance of WR Oversold and Bearish Engulfing signals a weak momentum with a high risk of further decline.

Conclusion

Despite robust fundamentals and positive institutional flows, TXN is currently weighed down by poor technical signals and a divergent analyst outlook. The recent price drop (-10.82%) and bearish candlestick patterns suggest caution. Investors should consider waiting for a pull-back or better technical confirmation before committing. For now, monitoring upcoming earnings and trade policy updates could provide key directional clues for the stock.