Struggling chipmaker Texas Instruments (TXN) has been hit with a rare double downgrade by Wall Street investment bank Goldman Sachs (GS).
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Goldman has downgraded TXN stock to a Sell rating from Buy previously, arguing that the Dallas-based semiconductor company is not well-positioned to participate in the artificial intelligence (AI) boom. In its sector outlook, Goldman Sachs says it sees “AI spending among hyperscalers continuing to move higher,” supporting digital, memory, storage and semiconductor equipment makers in 2026.
Texas Instruments is mostly focused on making microchips and processors for the industrial and automotive sectors and not benefiting from the AI investment cycle as much as competitors such as Nvidia (NVDA), says James Schneider, a top five-star rated analyst at Goldman Sachs.
A Gradual Recovery
Schneider writes in a note to clients that he expects a “gradual industrial & automotive recovery,” which could give a boost to the analog microchips made by Texas Instruments. However, he cautions that the upcycle will be uneven, driving “more discrimination in Semiconductor stocks.”
Schneider also notes that Texas Instruments’ “strategic capacity and capital choices this cycle will serve as an idiosyncratic drag that will weigh on the company’s margin and earnings recovery relative to peers.” He adds that Texas Instruments’ inventory is at “record levels,” leading to “muted margin and earnings expansion.”
Is TXN Stock a Buy?
The stock of Texas Instruments has a consensus Moderate Buy rating among 21 Wall Street analysts. That rating is based on 11 Buy, six Hold, and four Sell recommendations issued in the last three months. The average TXN price target of $192.55 implies 7.99% upside from current levels.
