Texas Instruments Incorporated (TXN) Stock is A Good Trade Option?

Maker of analog chips and other technologies Texas Instruments Incorporated (NASDAQ: TXN) will benefit from the recently enacted CHIPS Act. The new law intends to offer US semiconductor producers with up to $52 billion in subsidies and tax cuts. At the same time, only those that manufacture their own chips and do not outsource production are eligible for the program.

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Texas Instruments announced plans to raise capital investment on factory upgrades to $3.5 billion over the next four years. From 2025 through 2030, the business expects to keep increasing Capex at roughly 10% of sales. The Subsidy and Tax Relief Act will help to alleviate the financial strain and guarantee that the company’s activities continue to develop and modernize.

TXN sales increased 14 percent last quarter to $5.21 billion, above Wall Street analysts’ projections. Net income jumped 19% to $2.29 billion, while profits per share increased 20% to $2.45.

Texas Instruments Incorporated’s (TXN) strength is its diversity, which allows it to dodge the cyclical downturns that are common in several sectors. The firm manufactures analog and embedded chips for use in the automotive, manufacturing, personal electronics, communications, and other sectors.

Texas Instruments produced 77 percent of its sales from analog chips in the second quarter. Another 16% came from embedded chips, with the remainder coming from other items. The automotive and industrial industries accounted for the majority of the company’s growth, accounting for 62 percent of sales last year.

The development of these two markets following especially severe outbreaks of the pandemic has helped to compensate for slower smartphone sales. Furthermore, Texas Instruments Incorporated (TXN)reported that, after a brief pause, orders from China had resumed, as the country’s industry is obliged to catch up.

As a result of the excellent diversity and recovery of end markets, Texas Instruments is able to sustain high sales while improving financial performance.

TXN stock rose 3.02 percent for the week and 19.14 percent for the month. Its quarterly price performance was 8.23%, while its trailing twelve-month performance was -4.59%.