When: Q3 2026 earnings release

Then: Binary resolution: revenue >$5.4B with gross margin >60% upgrades toward Overweight; revenue <$5.2B or gross margin <58% downgrades toward Underweight

TRIM 10–15%, HOLD A 2.5–3% CORE, DO NOT ADD AT $282.91

• TXN is a strong company undergoing cyclical recovery, not a low-risk entry at $282.91 with unconfirmed momentum and hostile macro backdrop
• Reward-to-risk is less than 1:1 from $282.91: ~16.6% upside to $330 versus ~18.7% downside to $230
• Even using $312 fair value (30x forward EPS of $10.40), upside is only ~10.3% versus 18.7% downside
• Q2 fundamentals strong: revenue $5.463 billion, 61.4% gross margin, 42.6% operating margin, $2.189 billion FCF
• Forward EPS estimate of $10.40 versus TTM EPS of $6.57 implies ~58% earnings growth; if consensus is 20% too high, EPS would be ~$8.32 (implies ~$226 at 27.2x or ~$200 at 24x)
• Valuation not cheap: 43.1x trailing P/E, 27.2x forward P/E, 14.3x book value, ~1.4% FCF yield, PEG ratio 1.23
• Balance sheet favorable but not 'bulletproof': 4.86 current ratio, $7.0 billion cash, net debt ~$10.4 billion, debt-to-equity ~78%
• TTM FCF of $3.55 billion doesn't cover $5.18 billion annualized dividend at 1.5x coverage level
• Technical: $269.04 swing low and $267.70 lower Bollinger level identified; use daily close below $269 as first exit, $267.70 as hard stop
• TXN moves ~$10.91 per day; at 3% portfolio weight, move to $269 = ~0.15% portfolio risk, $230 = ~0.56%
• Macro headwinds: 30-year Treasury highest since 2007, 85% probability of no rate cuts in 2026
• Technical signals neutral: RSI 49.94, MACD histogram 0.87 but MACD line negative at -3.08, below 50-day average near $290.55
• Light-volume bounce on 4.89 million shares (below typical 9–12 million) provides little confirmation
• GE Appliances agreement validates U.S. manufacturing but doesn't justify higher terminal multiple
• AI infrastructure $720–$745 billion forecast is aggregate hyperscaler spending, not TXN-specific revenue
• Position sizing: reduce from 4% to max 3%, or from 3% to 2.5–2.7% core after trim
• Reconsider only after confirmed close above $292 with expanding volume or stabilization in $255–$265 area

→ vs aggressive: Reward-to-risk arithmetic is incorrect; from $282.91 to $330 is only ~16.6% upside versus ~18.7% downside to $230, not nearly 2:1

→ vs aggressive: The proposed $230 stop (~4.8 ATR below current price) is not an effective conservative risk control; a macro shock can gap through a stop before it executes

→ vs aggressive: TXN's past resilience during bond-market turbulence is encouraging but is not a hedge against the next shock

→ vs neutral: Waiting specifically to sell at $290–$292 is backward-looking risk management; small trim now followed by reduction on failed retest is more reliable

→ vs neutral: Position cap should be reduced from 3–4% to 2.5–3% given valuation, cyclical exposure, beta, and macro sensitivity

HOLD at 3% cap; no trim, no add; $269 daily close stop working signal; $267.70 hard technical stop; $230 deep-support reassessment; breakout above $292 requires 9-12M volume confirmation

• Aggressive analyst reward-to-risk math is wrong: upside is 16.6% ($47.09) versus downside of 18.7% ($52.68), slightly negative—not the two-to-one claimed
• PEG of ~0.47 depends on consensus 58% growth; a 20% miss yields EPS of ~$8.32 and PEG closer to 0.72
• Macro risks (rates, inflation, geopolitical, industrial demand) are correlated in stress regimes, not independent low-probability events; 30-year yield at 19-year high with 85% no-cut probability is a coherent risk-off regime
• Beta of 1.325 means TXN underperforms S&P in broad drawdowns
• $269 daily close stop is more executable and less gap-vulnerable than $230 200-day MA stop
• Q2 results were exceptional: 5 consecutive quarters sequential revenue growth, gross margins +550bps from trough, FCF nearly quadrupling in two quarters
• Cycle appears mid-stage, not late-stage; trimming at $282.91 crystallizes gains prematurely
• GE Appliances deal is qualitatively meaningful as multi-year supply agreement nearly doubling an OEM's spend during US reshoring, even without precise dollar figures
• Breakout above $292 needs volume expanding to 9-12M range to be valid; light-volume breakouts are not real signals
• 3% position with $269 stop limits position-level drawdown to ~15% (45bps portfolio impact), properly calibrated to absorb macro headwinds

→ vs aggressive: Reward-to-risk math error: upside is $47.09 (16.6%) not $282.91-$230 ($52.91); even using $312 fair value, upside is only 10.3% versus 18.7% downside—presented a setup less favorable than claimed

→ vs aggressive: PEG claim of ~0.47 anchors on consensus 58% growth being perfectly correct; a 20% miss puts EPS at $8.32 and PEG at 0.72; can't build high-conviction thesis on consensus being infallible

→ vs aggressive: Macro risks dismissed as 'low-probability trifecta' misunderstands correlated stress regimes; survivorship bias in 'TXN rallied through every bond tantrum' doesn't immunize from next shock

→ vs aggressive: Breakout above $292 is not automatic money—must be filtered for volume; pre-committing to ride to $330 without confirming breakout quality lacks discipline

→ vs conservative: Mandatory trim at $282.91 inappropriate given exceptional Q2 results and mid-stage cycle; treating as fully valued is contradicted by 5 consecutive quarters sequential revenue growth and accelerating FCF

→ vs conservative: Bear case math ($200-226 range) is a tail scenario, not base case; anchoring on bear case is mirror error of aggressive analyst anchoring on bull case

→ vs conservative: GE Appliances deal dismissed too cautiously; qualitative signal matters for terminal multiple even without precise revenue quantification