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Investing.com - Texas Instruments (NASDAQ:TXN) is reportedly planning another price increase affecting 10,000-20,000 SKUs globally, according to Bernstein research published Tuesday. The move comes as semiconductor industry dynamics shift, with major players like Analog Devices (NASDAQ:ADI) maintaining strong gross margins of nearly 59% and a substantial market presence with a $111 billion market capitalization.
The investment firm’s channel checks suggest TI issued notices to customers in late July, with new pricing expected to take effect in mid-August. Most affected products could see 20%-50% price increases, with approximately 15% of items rising by about 10% and another 15% potentially increasing by over 100%. For deeper insights into semiconductor industry pricing trends and competitive analysis, InvestingPro subscribers can access comprehensive research reports covering 1,400+ top stocks, including detailed margin and pricing power analysis.
Bernstein believes this move represents a deliberate strategy by TI to improve margins rather than a response to market conditions, noting that current demand doesn’t support a strong analog upcycle and inventory levels remain high across analog vendors.
The research firm suggests industrial and automotive segments will likely be most impacted by the price hikes, with consumer products affected to a lesser extent. Initial customer feedback has reportedly been negative, with some potentially looking to switch to alternative vendors for future design cycles.
Bernstein identifies Infineon (OTC:IFNNY) and Renesas as likely beneficiaries of TI’s pricing actions, rating both stocks Outperform with a preference for Infineon due to its "clearer margin expansion thesis." The firm also notes NXP Semiconductors (NASDAQ:NXPI) could potentially benefit, though to a lesser extent than the other companies.
In other recent news, Texas Instruments received an upgrade from Seaport Global Securities, moving its stock rating from Sell to Neutral. This shift reflects the firm’s reassessment of the company’s position in the analog inventory cycle and macroeconomic conditions. Meanwhile, Analog Devices has been the focus of several analyst updates. Goldman Sachs initiated coverage on Analog Devices with a Buy rating, setting a price target of $285, citing its strong market position and premium product pricing. Cantor Fitzgerald also upgraded Analog Devices from Neutral to Overweight, highlighting its industrial exposure and raising its price target to $270. Additionally, the company received favorable credit ratings from Moody’s, Fitch, and S&P for its recent senior notes offering, emphasizing its robust financial profile and leadership in the analog semiconductor market. These developments underscore the positive outlook from analysts and credit agencies on Analog Devices’ financial and market position.
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