Market News

TXN Results Impact the Chip Sector

While Texas Instruments (NASDAQ:TXN) didn’t exactly post a barn burner with its latest earnings report, it still managed to beat analyst expectations. Yet the disappointment seen with Texas Instruments didn’t stop there. It actually managed to spread to several other tech stocks.

Texas Instruments’ performance managed to sow fear, uncertainty, and doubt throughout much of the tech sector, and a sell-off began in earnest. Companies like AMD (NASDAQ:AMD) and Nvidia (NASDAQ:NVDA) saw share prices plunge over 3% at one point. Both recovered most of their losses and briefly went green in Wednesday afternoon trading. Intel (NASDAQ:INTC) also saw its share price slip and rally throughout the day.

The slide seen this quarter is likely temporary noted Jefferies’ Mark Lipacis. Lipacis actually looks for a “V-shaped recovery” to come later this year or possibly the first half of next year. Once that happens, Texas Instruments, in particular, should benefit from the additional capacity it’s built on. Others are less certain, especially considering the number of canceled orders seen in 2022’s fourth quarter.

Analyst consensus on all four stocks varies. Intel is at the bottom with a Hold, while Texas Instruments itself rates a Moderate Buy. Finally, both Nvidia and AMD rank as Strong Buy stocks. Intel stock’s upside potential is the smallest at 2.24%, with an average price target of $30.41. Meanwhile, AMD stock has the strongest upside potential at 13.26%, thanks to its average price target of $84.66.

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