Texas Instruments’ strong Q2 likely related to tariff pull-ins: analysts

Texas Instruments (NASDAQ:TXN) plunged during early market action on Wednesday, following a third quarter outlook affected by macroeconomic conditions and tariffs, according to analysts.

The strong second quarter results now appear to be more related to tariff pull-ins, which is the practice of importing goods earlier than planned to avoid future potential tariff increases, rather than an indication of recovering end markets.

“Mgmt.’s softened tone for 3Q reflects the dynamic macro/tariff environment, though cyclical recovery continues,” said Oppenheimer analysts Rick Schafer and Wei Mok in an investor note. “China sales up 19% Q/Q with growth across all end-markets, led by industrial. A portion of China strength attributed to possible tariff-related pull-ins/inventory builds.”

Texas Instruments CEO Haviv Ilan indicated that cyclical recovery is continuing.

“First, tariffs and geopolitics are disrupting and reshaping global supply chains,” Ilan said. “As we work closely with our customers, we are leveraging our global manufacturing capabilities to support their needs. We have flexibility and are prepared to navigate as things evolve … Cyclical recovery is continuing while customer inventories remain at low levels. In times like this, it is important to have capacity and inventory, and we are well positioned.”

Cantor reiterated its Neutral rating and $200 price target on Texas Instruments.

“Mgmt. specifically highlighted its China Industrial business running ‘hot’ in the June Q (Industrial +18% Y/Y; China +32% Y/Y with growth led by Industrial) – a dynamic highly suggestive of an inventory build by selective customers ahead of potential tariffs,” said Cantor analysts, led by Matthew Prisco, in an investor note. “So while NXP’s commentary this morning was very constructive in terms of cyclical signals, TXN’s commentary raises the red flag again around tariff-related pull-ins, which are now likely going to be a bigger concern for investors.”

Meanwhile, Bank of America reiterated its Neutral rating and $218 price target.

“TXN’s call suggests the recovery more likely to be lumpy than V-shaped, given the dynamic nature of US tariffs and China order patterns,” said BofA analysts, led by Vivek Arya, in an investor note. “We heard similar conservatism from other semi peers including TSMC (Q4 assumed down QoQ) and ASML (CY26E guided to be flattish YoY).”

KeyBanc Capital Markets remained upbeat on Texas Instruments. The investment firm reiterated its Overweight rating and hefty $240 price target on the stock.

“The broader recovery in Auto is shallow and continues to lag, while China Auto slowed in 2Q growing +2% q/q and +MSD y/y,” said KeyBank analysts John Vinh and Ryan Rosumny. “Despite this, TXN continues to see a broader cyclical recovery with 4 out of the 5 end markets growing … Mgt recognized that tariff-related pull-ins may partially offset the cyclical recovery, contributing to a conservative 3Q outlook.”

Texas Instruments’ competitors were down during Wednesday trading as well. Analog Devices (ADI) had declined 4%, STMicroelectronics (STM) fell 5.5% and NXP Semiconductors (NXPI) slid 3.7%.