This chip stock is outperforming and will continue going higher, TD Cowen says

CNBC

11-07-2025

Shares of Texas Instruments could be set up for more gains as the semiconductor industry backdrop improves, TD Cowen said. In a note dated Thursday, the firm upgraded the chip stock to buy from hold and hiked its price target to $245 from $200 — which implies more than 11% upside. "With more confidence the industrial semis de-stocking is ending, and flexible CapEx in 2026+, we raise our estimates and upgrade shares of TI to Buy with a $245 PT," analyst Joshua Buchalter wrote. "Tariff/ macro concerns linger, but we see TI positioned to outperform in either a sharp or gradual recovery." Texas Instruments has surged nearly 49% in the past three months, outpacing both the S & P 500 and artificial intelligence chip darling Nvidia in that timeframe. Shares have also more than doubled the broader market's gains in 2025, rising more than 17% year to date compared to the S & P 500's almost 7% jump. TXN NVDA 3M mountain TXN vs. NVDA, 3-month Though Buchalter noted that President Donald Trump's tariffs linger , which could lead to some demand constraints, he thinks that "inventory dynamics are the bigger swing factor for broad-based semis this earnings season." "Given TI's limited use of the channel, we believe the company is at the front of the line to participate in a recovery as consumption more closely matches sell-through, and for any potential end demand recovery," he wrote. "As supply and demand more closely align, we believe TI's cost-accretive US-based 300mm manufacturing footprint, and realigned embedded portfolio, position the company to regain share in key industrial and automotive end markets." Beyond that, Buchalter said the company will generate significant free-cash-flow growth, seeing it more than double in share price by 2026. He also estimates that its capital expenditures will reach $2.5 billion next year. Buchalter's bullish call is in the minority on Wall Street, however. Out of the 39 analysts covering Texas Instruments, only 12 in all have a strong buy or buy rating, according to LSEG, while 23 have stepped to the sidelines with a hold rating. The stock was almost 1% higher in the premarket on Friday following the upgrade.