BofA Downgrades Texas Instruments to Underperform, Citing Limited AI Exposure and Tariff Risks

Core Viewpoint - BofA Securities downgraded Texas Instruments from Neutral to Underperform, citing concerns over global tariffs and limited participation in the AI investment cycle impacting near-term growth [1] Company Analysis - Despite recognizing Texas Instruments' strong execution and asset quality, BofA highlighted that ongoing trade-related disruptions could hinder demand recovery in the industrial economy [2] - Texas Instruments has minimal exposure to AI-related capital expenditures compared to peers like Infineon [2] Valuation and Earnings Estimates - Analysts noted that Texas Instruments' stock valuation appears stretched, trading at 25x consensus and 31x BofA's calendar year 2026 earnings estimates, which is higher than Analog Devices despite weaker free cash flow generation [3] - BofA reduced its 2026 and 2027 earnings estimates by 3% each, to $6.05 and $6.91 per share, which are 8% and 13% below Street consensus, respectively [3]