Texas Instruments Incorporated (TXN) designs, manufactures, and sells semiconductors to electronics designers and manufacturers. With a market cap of $166.1 billion, the company develops analog ICs and embedded processors. 

Companies worth $200 billion or more are generally described as “mega-cap stocks,” and TXN definitely fits that description, with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the semiconductors industry. TXN remains the global leader in analog chip production, providing essential components for processing real-world signals. This dominance showcases the company's innovation and competitive edge in the semiconductor market. With a diverse product range including processors, microcontrollers, and calculators, TXN mitigates risk and capitalizes on cross-selling opportunities within its customer base.

Despite its notable strength, TXN slipped 17% from its 52-week high of $220.39, achieved on Nov. 8, 2024. Over the past three months, TXN stock declined 6.7%, underperforming SPDR S&P Semiconductor ETF’s (XSD) 2.5% drop during the same time frame.

In the longer term, shares of TXN dipped 2.5% on a YTD basis and fell 8.4% over the past 52 weeks, outperforming XSD’s YTD losses of 11% and 11.3% over the last year.

To confirm the bearish trend, TXN has been trading below its 200-day moving average since early December, 2024, experiencing some fluctuations. However, the stock is trading above its 50-day moving average since early May. 

TXN's strong performance can be attributed to solid data center demand and expansion in the enterprise systems market. The company's focus on expanding its product portfolio in Analog and Embedded Processing segments, along with investments in manufacturing and technology, are driving growth. Additionally, the company benefits from investment tax credits and funding agreements with the Department of Commerce for semiconductor manufacturing. Capacity expansion may initially impact margins, but is expected to be beneficial in the long run.

On Apr. 23, TXN shares closed up more than 3% after reporting its Q1 results. Its EPS of $1.28 beat Wall Street expectations of $1.06. The company’s revenue was $4.1 billion, beating Wall Street forecasts of $3.9 billion. For Q2, TXN expects revenue in the range of $4.2 billion to $4.5 billion.

In the competitive arena of semiconductors, Analog Devices, Inc. (ADI) has taken the lead over TXN, showing resilience with a marginal uptick on a YTD basis and 8.3% decline over the past 52 weeks.

Wall Street analysts are moderately bullish on TXN’s prospects. The stock has a consensus “Moderate Buy” rating from the 31 analysts covering it. While TXN currently trades above its mean price target of $180.94, the Street-high price target of $248 suggests a 35.6% upside potential.