Technology / Semiconductor / Internet Research

Nicolas Baratte

Nicolas Baratte has been a financial analyst since 2000, covering the Semiconductor sector and Global Technology. Nicolas has worked on the sell-side for JPMorgan, CLSA. On the buy-side for a Tiger fund and Prudential. Nicolas has covered semiconductors, Asian hardware and components, and the Global Tech supply chain. Nicolas lives mostly in Taiwan, sometimes in France and is in New York regularly.

Texas Instruments: Surprisingly Good 1Q25, Good 2Q Guidance. End-Markets Are Back to YoY Growth.

TXN: Good Results, Decent Guidance, the Stock Tanks -13%. The Market Didn’t like the New Narrative.

Texas Instrument: Small Beat in 3Q24, Uninspiring 4Q Guidance, the Stock Is Very Expensive.

Equity Bottom-Up

<ul>
<li>The demand &amp; inventory correction lasted for 9 quarters (4Q22-4Q24) but we’re already past peak recovery in 4Q25. 2-3Q25 revenue growth was ~15% YoY, declining to 10% in 4Q. </li>
<li>4Q guidance: revenues ok, weak EPS 1) higher tax rate 2) lower production loading. While management says that inventories are at a good level, TXN is cutting down production levels.</li>
<li>Consensus is ~10% too high for 2026 &amp; 27, Valuations not attractive, above average.</li>
</ul>


The demand &amp; inventory correction lasted for 9 quarters (4Q22-4Q24) but we’re already past peak recovery in 4Q25. 2-3Q25 revenue growth was ~15% YoY, declining to 10% in 4Q. 
4Q guidance: revenues ok, weak EPS 1) higher tax rate 2) lower production loading. While management says that inventories are at a good level, TXN is cutting down production levels.
Consensus is ~10% too high for 2026 &amp; 27, Valuations not attractive, above average.


TXN 3Q25: Peak Revenue Growth (Recovery) Is Behind Us, Consensus Too High, Stock a Bit Expensive.