Texas Instruments (NASDAQ: TXN) is often considered a safe long-term investment for conservative investors. Instead of developing expensive cutting-edge chips, TI only produces cheaper (albeit essential) analog and embedded chips for the automotive, industrial, personal electronics, communications infrastructure, and enterprise hardware markets. Pumping out large quantities of those cheaper chips enabled TI to generate plenty of cash for big buybacks and dividends.
Texas Instruments (NASDAQ: TXN) and Broadcom (NASDAQ: AVGO) both outperformed the market in 2022 as many other semiconductor stocks withered. Over the past 12 months, the S&P 500 declined 8% and the Philadelphia Semiconductor Index fell 11% -- yet TI's stock only dipped 1% as Broadcom's stock advanced 6%. TI and Broadcom held steady for similar reasons: They were well diversified across a wide range of sectors; had limited exposure to the post-pandemic slowdown of the PC market, which hurt many other chipmakers; and they generated plenty of cash for big buybacks and dividends.
In today's video, Jose Najarro, Nick Rossolillo, and Billy Duberstein discuss Texas Instruments' (NASDAQ: TXN) earnings and some of the headwinds it may face in the upcoming quarters. Nick believes that there might be a misrepresentation of the bullish thesis for this company.