Texas Instruments Stock Benefits From Higher Chip Sales Hopes—Key Levels to Monitor

Texas Instruments Incorporated

Shares in analogue semiconductor maker Texas Instruments (TXN) jumped 4% Friday after UBS upgraded the Dallas-based company’s stock to “buy” from “neutral” on expectations of growing chip sales. Analyst Timothy Arcuri says the company sits well positioned relative to its rivals to benefit from increasing lead times—how long it takes companies to fill an order—across the semiconductor industry this year at a time when pricing remains elevated.

A recent survey of chip customers and distributors conducted by the Swiss bank showed that more than half of respondents expect lead times to rise over the first half of 2024, up from just over a third in its prior survey. Arcuri argues this suggests lead times have bottomed, providing an early indication that orders for Texas Instruments, which makes chips to power everything from cars to consumer electronics, will improve this year.

The Texas Instruments share price broke below a trading range in late September but subsequently staged a V-shaped recovery that kicked off in early November. Friday’s trading action saw the stock break above a flag on above-average volume—a chart pattern indicating a continuation of the current move higher. If the stock continues to climb, monitor how the price responds to the $185 area, where it may face resistance from the top trendline of the previous trading range.

UBS has raised its 12-month price target on the stock to $195 from $170, implying 12.3% upside from Friday’s close of $173.65. The company reports fourth quarter and year-end 2023 earnings on Tuesday.

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