Texas Investors (TXN) stock has trailed the broader market since management issued a higher-than-expected forecast for the third quarter of 2026, even though the shares remain in an uptrend relative to their own recent averages. The divergence raises a question about whether buyers are fully backing the company's guidance or simply accepting it at face value.
On July 22, 2026, Texas Instruments reported second-quarter results and provided a forecast for the upcoming quarter. Since that release, the stock has risen by 0.8% through October 5, 2026. Over the same period, the S&P 500 gained 3.5%. This underperformance suggests that while the stock is holding firm, it has not outpaced the wider market's recovery or growth following the announcement.
Technically, Texas Instruments shares closed at $294.90 on October 5, 2026. This price sits above the average closing price of $270.73 for the last 50 trading days and significantly above the average of $247.77 for the last 200 trading days. With the shorter-term average positioned above the longer-term one, the stock maintains an uptrend structure. However, this technical strength has not translated into outperformance against the S&P 500 since the earnings release.
Management guided third-quarter revenue to a range of $5.65 billion to $6.15 billion. The midpoint of this range is $5.9 billion, which represents an increase from the $5.5 billion reported in the second quarter. Second-quarter revenue had grown 23% year over year and exceeded management's previous internal targets. The company attributed this growth to its industrial and data center markets, noting that data center revenue doubled from a year earlier. For the third quarter, management stated that expected growth would come primarily from increased unit sales rather than price increases.
Earnings guidance also pointed upward. Texas Instruments forecast earnings per share between $2.23 and $2.57 for the third quarter, compared to the $2.14 reported in the second quarter. Management indicated that almost none of the anticipated growth in the third quarter would stem from pricing power, though price increases are expected to continue into the fourth quarter.
Investors face a valuation trade-off when considering these forecasts. The stock trades at 44.4 times trailing twelve-month earnings, a multiple that is more than double the S&P 500's trailing P/E of 21.5. Management noted that its industrial market remains below its 2022 peak, suggesting room for future growth in that sector. Higher prices and continued industrial expansion could drive further gains if upcoming results validate management's claims.
A close below the 50-day average would signal that buyers are no longer supporting the forecast-driven uptrend. Conversely, third-quarter revenue exceeding the top of management's range would demonstrate demand running ahead of plan. For now, the chart agrees with management's direction, but the lag behind the S&P 500 remains a notable weakness in the stock's recent performance.