Texas Instruments Plunges 4.01% Amid Earnings Fallout—Is the Semiconductor Giant Losing Its Edge?

Summary
• Texas Instruments (TXN) trades at $180.6, down 4.01% intraday from $188.16 previous close
• Earnings report highlighted 16.4% YoY revenue growth but conservative guidance triggered sell-off
• Sector peers like ASML also face macroeconomic headwinds amid trade policy uncertainty

Texas Instruments has plunged to session lows amid a sharp selloff following its July 22 earnings report. The stock, which opened at $186.14, has since tumbled to $179.81 as traders react to management’s cautious outlook on cyclical recovery. With the semiconductor sector under pressure from global trade tensions and mixed industrial demand, investors are now scrutinizing whether TXN’s diversified analog and embedded chip business can weather the near-term storm.

Earnings Optimism Turns to Pessimism
Texas Instruments’ sharp decline follows a post-earnings selloff triggered by management’s revised guidance. While the company reported $1.41 EPS and 16.4% YoY revenue growth, CEO Haviv Ilan tempered optimism about a near-term cyclical rebound. The analog and embedded chip giant cited slower recovery in automotive markets and ongoing macroeconomic uncertainties, sparking a 13.9% drop from its July 22 close to July 31 lows. The sell-off accelerated as traders digested the company’s exposure to industrial and automotive sectors, which remain vulnerable to global supply chain disruptions.

Semiconductor Sector in Retreat as Trade Risks Loom
The semiconductor sector has mirrored TXN’s decline, with ASML and Samsung Electronics also reporting earnings-driven sell-offs. ASML’s 13.6% drop post-earnings highlights shared vulnerabilities in capital-intensive manufacturing and geopolitical trade tensions. TXN’s diversified analog chip business, however, contrasts with ASML’s specialized EUV lithography systems, making it more susceptible to broad-based industrial slowdowns. With the S&P 500 and Nasdaq hitting record highs, the sector’s underperformance underscores its cyclical nature and exposure to macroeconomic headwinds.

Bearish Plays and Gamma-Driven Options for Short-Term Volatility
• 200-day average: $189.94 (below current price)
• RSI: 17.84 (oversold)
• MACD: -3.65 (bearish divergence)
• Bollinger Bands: Price at $180.6 (near lower band at $180.5)

Technical indicators suggest a short-term bearish bias, with the 52-week low at $139.95 acting as a critical support. The options chain reveals high leverage and gamma for put options, ideal for capitalizing on near-term volatility. Two top picks:

• TXN20250808P180
- Put option, strike $180, expires 2025-08-08
- IV: 30.12% (moderate volatility)
- LVR: 64.24% (high leverage)
- Delta: -0.43 (sensitive to price drops)
- Theta: -0.036 (moderate time decay)
- Gamma: 0.046 (strong sensitivity to price changes)
- Turnover: $35,551 (high liquidity)
- Why it works: High gamma and leverage amplify gains if TXN continues its decline. Projected 5% downside to $171.57 would yield a put payoff of $8.43 per share.

• TXN20250808P177.5
- Put option, strike $177.5, expires 2025-08-08
- IV: 31.63% (moderate volatility)
- LVR: 91.04% (high leverage)
- Delta: -0.328 (moderate sensitivity)
- Theta: -0.067 (moderate decay)
- Gamma: 0.040 (strong responsiveness)
- Turnover: $10,013 (high liquidity)
- Why it works: Strong gamma and leverage offer outsized returns if TXN breaks below $177.5. A 5% drop to $171.57 would generate a put payoff of $5.93 per share.

For directional traders, the key level to watch is the 52-week low at $139.95. A break below $177.5 would validate the bearish case. Aggressive short-sellers may consider TXN20250808P180 into a breakdown below $180.

Backtest Texas Instruments Stock Performance
The backtest of Texas Instruments (TXN) after a -4% intraday plunge shows favorable performance metrics. The 3-Day win rate is 55.05%, the 10-Day win rate is 53.37%, and the 30-Day win rate is 57.58%. This indicates that TXN tends to rebound in the short term following a significant intraday decline. The maximum return during the backtest period was 2.95%, which occurred on day 59, suggesting that while the stock may experience further volatility, it has a tendency to recover and even exceed its pre-plunge levels.

Urgent Action Required: Lock in Shorts Before $177.5 Breakdown
The selloff in Texas Instruments reflects broader semiconductor sector fragility amid trade policy uncertainty and industrial demand slowdowns. With RSI at oversold levels and MACD in bearish territory, the stock remains vulnerable to further declines. Sector leader Intel (INTC) has also fallen -2.73%, signaling systemic risks. Investors should prioritize short-term bearish plays like TXN20250808P180 to capitalize on potential 52-week low tests. Monitor the $177.5 support level—breakdown here could trigger a cascade to $139.95. Aggressive traders should initiate puts now, while long-term holders may wait for a bounce above $185 to re-enter.