Texas Instruments Outlook - Mixed Signals Amid Volatility and Analyst Divergence

Market Snapshot

Headline Takeaway: Texas Instruments (TXN) is under pressure technically, with a weak internal diagnostic score of 3.57 and falling 9.82% recently. Analyst views are mixed, and despite strong fundamentals, the stock faces bearish momentum.

News Highlights

Recent developments highlight the semiconductor industry's shifting landscape and potential impact on Texas Instruments:

• McKinsey's Tariff Analysis: New research on U.S. tariffs and chip supply chains shows how policy shifts could reshape industry dynamics, with potential risks to manufacturers like Texas Instruments if tariffs are maintained.
• Semiconductors ETF Outflow: The U.S. Semiconductors ETF (SOXX) faced a $750 million net outflow in May 2025, reflecting investor caution and possibly impacting sector-wide sentiment, including Texas Instruments.
• Japan-U.S. Cooperation Talks: Japan is proposing collaboration with the U.S. on rare earths and semiconductors to counter China's influence. This could open long-term supply chain opportunities for Texas Instruments.

Analyst Views & Fundamentals

Analyst sentiment is mixed, with recent ratings including Strong Buy, Neutral, and Sell. The simple average rating is 3.33, while the performance-weighted rating is 2.34, indicating that analysts with better historical accuracy tend to lean bearish.

• Analyst Consistency: The divergence in ratings shows no strong consensus. Morgan Stanley, for example, has a 0.0% historical win rate, whereas Benchmark has a 60.0% win rate.
• Price Trend Alignment: The current price is down 9.82%, and most recent analyst ratings (like Sell) align with the negative trend. However, a Strong Buy rating adds a layer of optimism.

Fundamental Highlights:

• Net Cash Flow from Operating Activities per Share (YoY growth rate): 5.14% – score: 1 (internal diagnostic score)
• EV/EBIT: 136.78 – score: 2
• Gross Profit Margin (GPM): 57.89% – score: 3
• GMAR: 57.89% – score: 3
• Total Profit (YoY growth rate): 8.43% – score: 2
• Interest Coverage Ratio: 11.55% – score: 3
• CFOA: 5.32% – score: 4
• Overall Fundamental Score: 5.33 – indicating solid but not exceptional fundamentals.

Money-Flow Trends

Big-money investors are showing positive flow patterns, with an overall inflow ratio of 56.06% and a block inflow ratio of 57.25%. In contrast, Small and Medium flows are negative, with inflow ratios of 49.47% and 49.45%, respectively. This suggests institutional confidence while retail sentiment remains cautious.

Key Technical Signals

The technical outlook is weak, with a 3.57 internal diagnostic score (0-10) and a recommendation to avoid the stock. Here's the breakdown:

• WR Oversold – 2.64 internal diagnostic score (neutral rise), appears multiple times over the past 5 days.
• Bearish Engulfing – 1.15 internal diagnostic score (biased bearish), seen on 9/10 and 9/8.
• RSI Oversold – 6.91 internal diagnostic score (neutral rise), frequent signal from 9/10 to 9/8.

Summary Insight: Technical indicators are mixed but bearish signals dominate (2 bearish vs. 0 bullish). The market remains in a volatile state with no clear direction.

Conclusion

Texas Instruments is facing a complex mix of strong fundamentals and weak technical momentum, with mixed analyst ratings. While the stock shows healthy operating cash flow and gross margins, the falling price and dominant bearish patterns suggest caution. Investors may want to wait for a clearer trend or positive earnings surprises before making a move. For now, a conservative stance is advised given the current technical setup.