What Happened?
Shares of analog chip manufacturer Texas Instruments (NASDAQ: TXN) jumped 4.8% in the afternoon session after a Bernstein research report revealed the company is planning significant price increases on thousands of its products, signaling a strategy to boost margins. The move follows a Bernstein research report published Tuesday, which indicated that Texas Instruments is planning price increases of 20% to 50% on 10,000 to 20,000 products. According to the research firm, this is a strategic effort to improve margins rather than a reaction to market conditions. This company-specific news is amplified by broader positive sentiment in the semiconductor industry. Last week, the U.S. government announced that chipmakers with domestic manufacturing capacity, such as Texas Instruments, would be exempt from potential 100% tariffs on semiconductors. This exemption has removed a significant uncertainty for investors, boosting confidence in the sector.
After the initial pop the shares cooled down to $192.75, up 4.9% from previous close.
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What Is The Market Telling Us
Texas Instruments’s shares are somewhat volatile and have had 14 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 20 days ago when the stock dropped 12.3% on the news that it issued a weaker-than-expected forecast for the third quarter, sparking concerns about future demand for its chips. The disappointing guidance overshadowed the company's second-quarter results, which had actually surpassed Wall Street's expectations for both revenue and earnings. For the current third quarter, Texas Instruments projected earnings per share between $1.36 and $1.60, with the midpoint falling below analysts' consensus of $1.51. The company also forecast revenue in the range of $4.45 billion to $4.80 billion, which was viewed as cautious. Management attributed the soft outlook to a difficult automotive market and uncertainties related to U.S. tariffs, which may have caused some customers to pull orders forward, making true demand difficult to assess. Because Texas Instruments serves a vast number of customers across many sectors, its performance is often considered a bellwether for the technology industry. The cautious forecast sent a ripple effect through the semiconductor sector, with shares of peers like Analog Devices (ADI) and NXP Semiconductors (NXPI) also trading lower.
Texas Instruments is up 3.1% since the beginning of the year, but at $192.75 per share, it is still trading 12.9% below its 52-week high of $221.25 from July 2025. Investors who bought $1,000 worth of Texas Instruments’s shares 5 years ago would now be looking at an investment worth $1,390.
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