Home News Texas Instruments Stock Benefits from Higher Chip Sales Hopes: Key Levels to Watch

Texas Instruments Stock Benefits from Higher Chip Sales Hopes: Key Levels to Watch

by SuperiorInvest

Key takeaways

  • Shares of Texas Instrument rose 4% on Friday after UBS analysts upgraded the stock amid expectations of improving chip sales.
  • A recent survey of chip customers and distributors showed that half of respondents expect delivery times to increase during the first half of 2024.
  • The Texas Instruments stock price has broken out of a flag pattern, indicating a continuation of the current trend.

Built-in Texas Instruments

Source: TradingView.com.

Shares of analog semiconductor maker Texas Instruments (TXN) rose 4% on Friday after UBS upgraded the Dallas-based company’s stock to “buy” from “neutral” on expectations for increased sales of chips. Analyst Timothy Arcuri says the company is well positioned relative to its rivals to benefit from rising lead times (the time it takes companies to complete an order) across the semiconductor industry this year at a time when prices remain high.

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

Texas Instruments’ stock price fell below a trading range in late September, but subsequently experienced a V-shaped recovery that began in early November. Friday’s trading action saw the stock break above a flag on above-average volume, a chart pattern that indicates a continuation of the current bullish move. If the stock continues to rise, monitor how the price responds to the $185 area, where it may face resistance from the upper trend line of the previous trading range.

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

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As of the date of writing this article, the author does not hold any of the above securities.

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