Barclays: Retail buyers likely drove the latest leg of the rally
Investing.com -- Barclays (LON:BARC) downgraded Texas Instruments (NASDAQ:TXN) to "Underweight" from "Equal Weight" and cut its price target to $125 amid growing risks tied to U.S.-China trade tensions, rising production costs, and weakening demand in key end markets.
The brokerage said Texas Instruments is “getting hit from all angles,” with exposure to China a major concern. China’s push to build a domestic analog semiconductor industry is already cutting into U.S. market share.
Barclays estimated Texas Instruments’ China exposure at around 20% and warned that tariffs could accelerate the shift to local suppliers.
“We think the destruction of Consumer demand happens over the course of the year,” Barclays wrote, highlighting risks in auto, handset, PC, and IoT markets.
Autos in particular are expected to face pressure as higher prices from tariffs weigh on consumer spending.
Barclays also flagged a mismatch between Texas Instruments’ spending and market realities.
The company has spent about $5 billion annually on expanding production and is expected to do the same in 2025.
However, with demand softening and global trade conditions worsening, Barclays expects underutilization and pressure on margins.
Consensus forecasts for Texas Instruments’ revenue and gross margins are too optimistic, according to the note.
Barclays modeled a 50% headwind to China business and a 10% hit to auto, which could shave about $1.00 off 2026 earnings. The firm now expects 2026 earnings of $6.49, or $5.50 in a downside scenario.
Texas Instruments, a bellwether in the analog semiconductor space, is likely to feel prolonged pressure from the global decoupling between the U.S. and China, Barclays said.