Texas Instruments Plunges 3.72%—Is This a Buying Opportunity or a Warning Signal?

Summary
• Texas Instruments (TXN) trades at $188.45, down 3.72% from its previous close of $195.74
• CFO Rafael Lizardi warns of slower-than-expected demand recovery in the automotive sector
• Sector peers like Intel (INTC) rally 2.25% as U.S. tariff exemptions boost confidence

Today’s sharp selloff in Texas Instruments has sent shockwaves through the semiconductor sector, with the stock trading near its intraday low of $181.69. The move follows cautious remarks from the CFO about tepid demand recovery, particularly in automotive markets. While the sector remains resilient, TXN’s decline raises critical questions about its near-term trajectory and whether this dip signals a strategic entry point for long-term investors.

CFO's Cautious Outlook Sparks Sell-Off
Texas Instruments’ 4.5% intraday drop stems directly from its CFO Rafael Lizardi’s remarks at the Citi Global TMT Conference. Lizardi highlighted a 'gradual recovery' in chip demand, with automotive sector challenges tempering expectations. The warning contradicted investor hopes for a post-April tariff-driven rebound, triggering a sell-off. Compounding concerns, Lizardi noted elevated capital expenditures and slower share repurchases, signaling near-term margin pressures. The stock’s decline reflects market skepticism about its ability to navigate sector-specific headwinds despite broader semiconductor industry tailwinds.

Semiconductor Sector Mixed as Intel Gains Ground
While Texas Instruments tumbles, the semiconductor sector remains broadly positive. Intel (INTC) surges 2.25%, buoyed by its 9.9% government equity stake under the CHIPS Act. The sector’s 0.56% daily gain contrasts with TXN’s underperformance, highlighting divergent investor sentiment. Companies like Broadcom (AVGO) and AMD (AMD) also outperform, with AVGO up 1.21% and AMD rising 0.23%. TXN’s struggles underscore its vulnerability to automotive demand cycles, whereas peers benefit from diversified exposure to AI and data center growth.

Options Playbook: Leveraged Puts and Calls for Volatility
• MACD: 1.517 (bullish divergence), RSI: 55.17 (neutral), 200D MA: $188.56 (near support)
• Bollinger Bands: $182.19 (lower band) to $211.27 (upper band), with price near lower boundary
• Kline pattern: Short-term bearish trend, long-term bullish bias

Top Options Plays:
1. TXN20250912P187.5 (Put):
- Strike: $187.5, Expiry: 9/12, IV: 27.88%, Delta: -0.4476, Theta: -0.0295, Gamma: 0.0479, Turnover: 186,742
- IV (27.88%): Mid-range volatility, reasonable cost
- Delta (-0.4476): Moderate sensitivity to price drops
- Gamma (0.0479): Strong sensitivity to price acceleration
- Turnover (186,742): High liquidity ensures ease of entry/exit
- Payoff at 5% downside (ST = $179.03): $8.47 profit per contract. Ideal for aggressive short-term bearish bets.

2. TXN20250912C182.5 (Call):
- Strike: $182.5, Expiry: 9/12, IV: 30.09%, Delta: 0.7566, Theta: -0.3544, Gamma: 0.0351, Turnover: 105,783
- IV (30.09%): Slightly elevated, reflecting market uncertainty
- Delta (0.7566): High sensitivity to price rebounds
- Theta (-0.3544): Aggressive time decay, suitable for near-term plays
- Turnover (105,783): Strong liquidity for quick execution
- Payoff at 5% upside (ST = $197.87): $5.37 profit per contract. Best for bullish traders expecting a rebound above $182.5.

Action Insight: Aggressive bulls may consider TXN20250912C182.5 into a bounce above $182.5, while bears should eye TXN20250912P187.5 for a 5% downside scenario. Both contracts offer high leverage and liquidity to capitalize on short-term volatility.

Backtest Texas Instruments Stock Performance

Act Now: TXN at Pivotal Crossroads—Buy the Dip or Cut Losses?
Texas Instruments’ 3.72% decline reflects a critical juncture for the stock. While the company’s long-term fundamentals remain intact—evidenced by its 52-week high of $221.69 and 34.8x dynamic P/E—the near-term outlook hinges on its ability to navigate automotive demand headwinds. Intel’s 2.25% surge as a sector leader underscores the importance of diversified exposure. For TXN, a break below $182.19 (lower Bollinger Band) could trigger further selling, while a rebound above $187.5 (key resistance) may signal a short-covering rally. Investors should monitor the 200D MA at $188.56 as a critical support level. Watch for $182.19 breakdown or regulatory reaction.