Tariff Uncertainty Hits Texas Instruments (TXN) as Auto, Industrial Chip Demand Softens

Key takeaways

Seasonal window

This seasonal window begins on Dec 26, 2025 and spans 243 trading days. Historically, during this period, Texas Instruments has shown a strong upside tendency for long positions, even as the stock is currently trading at $186.25 and remains well below its 52-week high of $220.39, leaving it about 15.5% under that peak.^[1]

Across the last 10 years, this long-biased pattern has produced a positive outcome in 9 years and a loss in just 1 year, so the Percent Profitable is 90% with 9 winners and 1 loser. In the winning years, Texas Instruments has gained an average of 16.98%, while including all years, the average outcome for the window is a 15% gain, which reflects the drag from the single losing year.

The strongest year in the sample was 2018, when the stock returned 33.52% over the window, with a best point-to-peak move, or maximum favorable excursion, of 42.22% and a relatively modest worst drawdown from entry of 4.62%. At the other end of the spectrum, 2021 was the lone losing year, with a net decline of 5.71%, a limited best run-up of 0.75% and a deep maximum adverse excursion of 23.68%, illustrating how a weak tape can translate into sizable intraperiod downside even when the overall seasonal tendency is positive.

The broader distribution of years shows that this is not a low-volatility pattern. In 2019 and 2024, for example, Texas Instruments finished the window up 12.69% and 9.93% respectively, yet both years saw maximum adverse excursions of more than 26%, highlighting that investors historically have had to tolerate double-digit drawdowns to capture the eventual gains. By contrast, 2020 delivered an 18.5% net return with a 23.11% peak run-up and only a 0.56% worst drawdown, underscoring that some cycles have been both strong and relatively smooth.

The 10-year average seasonal trend chart suggests that gains in this window tend to build gradually rather than in a single burst, with a steady upward slope that accelerates in the middle portion of the period before flattening out toward the end. That pattern points to a tendency for rallies to develop over months, giving multiple opportunities for trend participation but also leaving room for pullbacks along the way.

The combined net, peak favorable and worst adverse moves by year highlight how upside and downside have coexisted within this window.

The stacked view of net results alongside maximum favorable and adverse excursions shows that even in most winning years, the stock has experienced notable downside before finishing higher, while the better years have combined strong peak rallies with comparatively contained drawdowns. Taken together, the historical pattern defines the quantitative seasonal backdrop for the current period.

History does not guarantee future results; adverse excursions (MAE) can be large even in winning windows.

Price and near-term drivers

Texas Instruments last traded at $186.25, down 13.34% on the day and roughly 15.5% below its 52-week high of $220.39, as investors continue to digest a series of cautious outlooks and a slower-than-hoped recovery in key end markets.^[1][5][7]

The stock’s latest leg lower followed a Q4 forecast that called for revenue of about $4.4 billion and earnings per share between $1.13 and $1.39, both below Wall Street expectations and interpreted as a sign that the analog chip recovery remains delayed.^[5][7] That warning came on the heels of a July quarter in which Texas Instruments beat on both revenue and earnings but paired the beat with a softer Q3 outlook, triggering a double-digit one-day drop as investors recalibrated growth assumptions.^[1]

Management has pointed to a “shallow” recovery in automotive and industrial demand, traditionally two of the company’s most important growth engines, as customers work through elevated inventories and navigate tariff-related uncertainty.^[1][4][7] Analysts have also noted that some of the earlier strength in orders may have reflected customers pulling forward demand ahead of potential tariff changes, which could leave a softer patch in subsequent quarters as those effects unwind.^[2]

Macro conditions have not helped. Ongoing tariff and geopolitical tensions have disrupted supply chains and complicated planning for Texas Instruments’ global customer base, particularly in China-sensitive segments, adding another layer of uncertainty to an already uneven analog cycle.^[3][4] That backdrop has kept sentiment cautious even as the company continues to generate solid profitability and maintain its long-term focus on analog and embedded processing.

The chart below situates the latest move in its recent multi-month context.

Earnings and guidance backdrop

Texas Instruments’ recent financial results have been mixed, with solid execution in the reported numbers but a more guarded tone in the outlook. For the second quarter of 2025, the company delivered revenue of $4.45 billion versus estimates of $4.36 billion and earnings per share of $1.41 versus $1.35 expected, while net income rose 15% year over year to $1.3 billion.^[1] Despite that beat, the stock sold off as investors focused on what the guidance implied for the next leg of the cycle.

For the third quarter, management guided revenue to a range of $4.45 billion to $4.8 billion, with earnings per share between $1.36 and $1.60, placing the midpoint of both ranges below consensus forecasts.^[1] The company later projected Q4 revenue at about $4.4 billion and earnings per share between $1.13 and $1.39, again shy of Street expectations and reinforcing the message that any recovery in analog demand is likely to be gradual rather than sharp.^[5][7]

Chief executive Haviv Ilan has emphasized that automotive and industrial markets remain the primary growth drivers but acknowledged that the rebound in those segments has been “shallow,” with customers cautious on new orders amid macro and tariff uncertainty.^[1][4][7] That stance has encouraged some investors to wait for clearer signs of an inflection before re-rating the stock, even as others point to Texas Instruments’ long history of navigating cycles and investing through downturns.

Macro and sector context

Texas Instruments sits at the intersection of several macro themes that have been in flux throughout 2025. Tariffs and broader geopolitical tensions have disrupted supply chains and complicated demand planning for customers in automotive, industrial and other end markets, contributing to lumpier order patterns and a more cautious tone in management commentary.^[3][4]

Within the analog chip sector, the recovery has been slower than many had anticipated, with Reuters reporting that tariffs have prolonged the adjustment process and weighed on visibility for companies like Texas Instruments.^[7] While long-term demand for analog and embedded chips tied to electrification, factory automation and connectivity remains intact, the near-term environment has been characterized by inventory digestion and selective spending.

At the same time, some analysts have argued that earlier strength in Texas Instruments’ results was partly driven by customers pulling forward purchases ahead of potential tariff changes, which may now be reversing as those customers work through elevated stockpiles.^[2] That dynamic can make quarter-to-quarter trends noisier, even if the underlying secular story remains constructive.

Valuation and positioning

With the stock down sharply from its highs and modestly negative year to date, valuation has become a more prominent part of the conversation around Texas Instruments.^[1][3] Some commentary has framed the pullback as a reset that could create opportunity if the analog cycle stabilizes and tariff headwinds ease, while others remain cautious given the lack of a clear demand inflection and the risk of further estimate cuts.^[3][5][7]

Short interest in the shares sits at 1.96%, a relatively low level that suggests positioning is not heavily skewed toward outright bearish bets despite the recent volatility.^[2] That leaves room for sentiment to shift in either direction as new data on orders, tariffs and macro conditions emerge over the coming quarters.

What to watch as the window opens

As Texas Instruments moves into this historically strong 243-day seasonal window, investors will be watching how the next few earnings reports line up against the pattern. A key focus will be whether revenue and earnings begin to show clearer signs of acceleration in automotive and industrial demand, or whether guidance remains cautious and keeps pressure on the shares.^[1][5][7]

On the macro side, any developments around tariffs and U.S.-China trade relations that improve visibility for global supply chains could help ease one of the main overhangs on the story, while renewed tensions or new trade barriers would risk extending the current soft patch.^[3][4] Price-wise, traders are likely to monitor how the stock behaves around recent lows and whether it can build a base from which to participate in the historically favorable seasonal stretch, with the distance to the prior 52-week high offering a simple gauge of how much ground has been lost.^[1]

Positioning will also matter. With short interest at 1.96%, any improvement in fundamentals or macro tone could see incremental buyers step in rather than a large short-covering wave, while a further deterioration in outlook could invite more active bearish positioning.^[2][5] How the stock trades inside the window relative to its historical pattern will help clarify whether this cycle is tracking the typical seasonal script or diverging from it.