| Position | Action |
|---|---|
| Initial position | 1.0% portfolio allocation at $288 |
| Confirmed daily close above 50 SMA at $293.62 on above-average volume | Scale to 2.0% portfolio allocation |
| $265 support breaks | Cut fully; do not average down toward 200 SMA |
TXN at $286 represents a generational buying opportunity driven by a Q2 2026 earnings inflection that demolished "soft guidance" fears, a 159% sequential FCF surge from capex maturation, exposure to 30-35% industrial analog growth, and a mispriced valuation at 27.5x forward P/E with PEG under 0.5 on a 58% EPS trajectory.
| Indicator | Value | Signal |
|---|---|---|
| 200 SMA | $226.88 | bullish |
| 50 SMA | $293.62 | bearish |
| 10 EMA | $280.13 | bullish |
| RSI (14) | 50.54 | neutral |
| MACD | -4.34 | bullish |
| MACD Signal | -4.91 | bullish |
| MACD Histogram | +0.57 | bullish |
| ATR (14) | $12.27 | neutral |
| Bollinger Upper Band | $302.53 | bearish |
| Bollinger Middle (20 SMA) | $283.57 | neutral |
| Bollinger Lower Band | $264.61 |
This report is AI-generated for informational and educational purposes only and is not investment advice or a recommendation to buy or sell any security. Full disclaimer.
Initiate 1.0% TXN at $288, scale to 2.0% on 50 SMA reclaim at $293.62, hard stop at $265
Initiate 1.0% TXN at $288 with $265 hard stop (below Bollinger lower band), scaling to 2.0% only on confirmed 50 SMA reclaim at $293.62 with volume. Full exit if $265 breaks. Reassess at MCHP earnings (late August) and TXN Q3 (October).
When: Confirmed daily close above 50 SMA at $293.62 on above-average volume
Then: Scale to 2.0% portfolio allocation
· concedes: TXN is down 16% from the high ($334) to current $286; Price dropped 11% in one month; Technical picture shows recent 16% drawdown from peak; Bear's 'elevated P/E of 43.5x' concern is acknowledged (though bull counters it reflects cyclical bottom)
TXN is a cyclical mid-cycle name being valued like a secular grower, with peak multiples applied to peak earnings—the precise setup that historically precedes 30-50% drawdowns in semiconductor cycles.
· concedes: FCF growth of 80-100% is still genuinely strong when normalized for capex decline; Operating cash flow increase from $1,520M to $2,703M (+78%) is 'genuinely strong'; If Q3 guidance resets expectations upward, the bull wins — but risk-reward today is not asymmetric in his favor
→ vs neutral: Waiting for 50 SMA reclaim at $293.62 is the single most dangerous advice — by the time MACD zero-crosses and 50 SMA is reclaimed, you're chasing momentum, not buying a dip
→ vs neutral: Waiting for MCHP confirmation in late August means missing the move — Zacks screen-driven flows and institutional investors will already be in before the read-through is confirmed
→ vs conservative: 'Better entry 5-10% lower' is a trap — same logic kept people out of NVDA at $400, AVGO at $900, MSFT at $300; asking to time a 21% drawdown to $227 may never come
→ vs conservative: TTM P/E of 43.5x is misleading — forward P/E is 27.7x for a company delivering 58% earnings growth; this is a growth stock trading at a value multiple relative to its trajectory
→ vs conservative: Soft guidance was two months ago and is already priced in — current news flow is positive with Zacks Strong Buy, design win, and 30-35% industrial demand growth
→ vs conservative: 200 SMA at $226.88 is a structural floor that has risen $27 in 90 days — waiting for a flush to that level requires timing a remote 21% drawdown
| bullish |
Support: 264.61 · 269.04 · 280.13 · 283.57 · 226.88 | Resistance: 302.53 · 293.62 · 330.59
The recommendation is HOLD with a tactical bullish bias. The preferred bullish scenario targets $302.53 (+5.7%) or $330.59 (+15.6%) on a sustained close above $293.62 (50 SMA) with MACD zero-cross confirmation, with stop-loss at $269.04 (−6.0% risk) and Risk/Reward of approximately 2.6:1. The current momentum setup suggests a bear-trap/capitulation-bottom pattern typical of healthy corrections within a larger uptrend, with ATR contracting from $15.35 peak to $12.27 as a bullish volatility signature. Earnings volatility and macro/cycle risk are key concerns for this semiconductor cyclical.
Market Cap
$261.26 billion
TTM P/E Ratio
43.54x
Forward P/E
27.49x
PEG Ratio
1.23
Price/Book
14.50x
EPS (TTM)
$6.57
Forward EPS
$10.40
Dividend Yield
2.04%
Beta
1.325
52-Week High
$334.03
52-Week Low
$152.73
50-Day Average
$297.43
200-Day Average
$227.02
TTM Revenue
$19.45B
TTM Gross Profit
$11.35B
Gross Margin
58.3%
Operating Margin
42.6%
Profit Margin
31.1%
TTM EBITDA
$9.52B
TTM FCF
$3.55B
Return on Equity (ROE)
35.2%
Return on Assets (ROA)
13.1%
Debt/Equity
78.0%
Q2 2026 Revenue
$5,463M
Q2 2026 Gross Profit
$3,352M
Q2 2026 Operating Income
$2,327M
Q2 2026 Net Income
$1,980M
Q2 2026 Diluted EPS
$2.14
Q2 2026 Gross Margin
61.4%
Q2 2026 Operating Margin
42.6%
Q2 2026 Operating CF
$2,703M
Q2 2026 CapEx
-$514M
Q2 2026 Free Cash Flow
$2,189M
Q2 2026 Dividends Paid
-$1,295M
Q2 2026 Buybacks
-$27M
Total Assets
$35.88B
Cash & ST Investments
$7.00B
Total Debt
$14.05B
Net Debt
$10.39B
Stockholders' Equity
$18.01B
Retained Earnings
$53.16B
Total Liabilities
$17.88B
Inventory
$4.61B
Receivables
$2.52B
Gross PP&E
$17.86B
Net PP&E
$11.91B
Current Ratio
4.86x
Treasury Stock
$41.94B
Q1 2026 Revenue
$4,825M
Q1 2026 Gross Profit
$2,799M
Q1 2026 Operating Income
$1,825M
Q1 2026 Net Income
$1,545M
Q1 2026 Diluted EPS
$1.68
Q4 2025 Revenue
$4,423M
Q4 2025 Gross Profit
$2,472M
Q4 2025 Operating Income
$1,505M
Q4 2025 Net Income
$1,163M
Q4 2025 Diluted EPS
$1.27
Q3 2025 Revenue
$4,742M
Q3 2025 Gross Profit
$2,723M
Q3 2025 Operating Income
$1,748M
Q3 2025 Net Income
$1,364M
Q3 2025 Diluted EPS
$1.48
Q2 2025 Revenue
$4,448M
Q2 2025 Gross Profit
$2,575M
Q2 2025 Operating Income
$1,563M
Q2 2025 Net Income
$1,295M
Q2 2025 Diluted EPS
$1.41
R&D Spend
~$535M/quarter
Q2 2025 Gross Margin
57.9%
Q2 2025 Operating Margin
35.1%
Tax Rate
11–15%
Strengths
Concerns
TXN's fundamentals are exceptionally strong with Q2 2026 showing blowout results (revenue $5.46B +22.8% YoY, EPS $2.14 +51.8% YoY) driven by gross margin expansion of ~350 bps to 61.4% and operating leverage. The company demonstrates a fortress balance sheet with a current ratio of 4.86x, low net debt/EBITDA of ~1.1x, and TTM FCF of $3.55B. Critically, CapEx is declining from $1.31B to $514M as fab build-outs mature, signaling the heavy investment cycle is ending and FCF expansion is underway. Despite these strengths, the TTM P/E of 43.54x and P/B of 14.50x represent premium valuation, and the elevated beta of 1.325 indicates notable downside volatility risk. The final recommendation is HOLD given valuation concerns, though long-term investors may add on pullbacks toward the 50-day MA of ~$297.