Is It Finally Time to Buy This Leading Chip Stock Again?

Group 1 - Texas Instruments (TI) has underperformed the S&P 500 and the semiconductor industry over the past three years, but its stock has rallied nearly 20% since April 2024 [1] - Elliott Management disclosed a $2.5 billion stake in TI and proposed cutting back on capital expenditures to return to free cash flow-per-share growth [2][3] - TI management had previously planned to increase capital expenditures to an average of $5 billion per year through 2026, but this elevated spending coincided with a decline in revenue and profitability due to a shift from chip shortage to oversupply [3][4] Group 2 - In Q1 2024, TI's revenue and GAAP operating profit decreased by 16% and 34% respectively compared to the previous year, continuing a trend of declines from 2023 [4] - Despite the need for expansion and modernization of facilities, TI's aggressive capital spending plans have raised skepticism among investors, as the stock has performed poorly relative to the semiconductor industry [6] - There is a potential conflict between Elliott's immediate focus on free cash flow-per-share growth and TI's long-term strategy of building excess manufacturing capacity [7]