Texas Instruments Stock To Fall 30% On Recession Concerns?
Question: How would you react if you held Texas Instruments stock (NASDAQ: TXN) and its value fell by 30% or more in the upcoming months? Although this might seem extreme, such an occurrence has happened before and could repeat itself. Texas Instruments stock has been a mixed performer of late. It has declined by about 4% year-to-date in 2025 and has gained about 6% over the last 12 months. This compares to the S&P 500 which has gained about 10% over the past 12 months. While the broader semiconductor industry has picked up a bit, led by a surge in demand for artificial intelligence chips, and a modest recovery in the personal computer market, Texas Instruments has been witnessing some headwinds in its key automotive and industrial segments. Moreover, the overall market is undergoing a significant sell-off, spurred by increasing concerns about a U.S. recession following tariffs imposed by President Donald Trump on major trading partners. Demand for Texas Instruments products is more levered to the broader economy and industrial activity and the stock could see a sharp correction in the event of a downturn.
Here’s the point: The key takeaway is that during a downturn, Texas Instruments stock might incur meaningful losses. Data from 2020 indicates that TXN stock lost about 30% of its value in only a few quarters while also seeing a peak-to-trough decline of about 22% during the 2022 financial crisis, faring a tad worse than the S&P 500. This raises the question: Could the stock see a sell-off and reach as low as $125 if a similar situation were to unfold? Naturally, individual stocks are generally more volatile than diversified portfolios. Therefore, if you are looking for growth with reduced volatility, you might consider the High-Quality portfolio, which has outperformed the S&P 500 and generated returns of over 91% since its inception.
President Donald Trump’s aggressive tariff measures -including a 20% tariff on Chinese imports and 25% on imports from Canada and Mexico, along with tighter immigration restrictions – have raised concerns that inflation might return. All of this suggests that the U.S. economy could encounter significant difficulties and even a recession – our analysis here on the macro picture. In fact, last week, during an interview, the President did not rule out the possibility that new tariffs might trigger a recession. When taking into account the heightened uncertainty from the Trump administration’s policies, these risks become especially critical. The ongoing Ukraine–Russia war and global trade tensions further obscure the economic outlook. Tariffs increase import costs, leading to higher prices, reduced disposable income, and weaker consumer spending. This could impact TXN as the company’s product lineup is seen to be more dependent on macroeconomic factors, compared to other parts of the semiconductor industry. For perspective, industrial and automotive chips, which are very cyclical, account for over two-thirds of Texas Instruments’ revenue.
How resilient is TXN stock during a downturn?
TXN stock has seen an impact that was slightly worse than the benchmark S&P 500 index during some of the recent downturns. Worried about the impact of a market crash on TXN stock? Our dashboard How Low Can Texas Instruments Stock Go In A Market Crash? has a detailed analysis of how the stock performed during and after previous market crashes.
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Inflation Shock (2022)
• TXN stock fell 22.3% from a high of $191.01 on 29 March 2022 to $148.34 on 16 October 2022, vs. a peak-to-trough decline of 25.4% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 14 May 2024
• Since then, the stock has increased to a high of $220.29 on 10 November 2024 and currently trades at around $180
Covid Pandemic (2020)
• TXN stock fell 29.8% from a high of $133.13 on 19 February 2020 to $93.50 on 16 March 2020, vs. a peak-to-trough decline of 33.9% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 17 July 2020
Global Financial Crisis (2008)
• TXN stock fell 62.4% from a high of $36.59 on 9 October 2007 to $13.77 on 2 March 2009, vs. a peak-to-trough decline of 56.8% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 2 May 2013
Premium Valuation
At its current price of about $180 per share, TXN is trading at approximately 34x consensus 2025 earnings, which seems somewhat expensive. Moreover, the company’s growth rates have been middling. Revenues contracted over 2024, and are expected to grow in the high single-digits for 2025. With recession risks increasing, things could get tricky for TXN.
Given this potential slowdown in growth and the broader economic uncertainties, ask yourself the question: do you intend to hold on to your Texas Instrument stock now, or will you panic and sell if it begins dropping to $150, $125, or even lower? Holding onto a declining stock is never easy. Trefis collaborates with Empirical Asset Management—a Boston area wealth manager—whose asset allocation strategies yielded positive returns during the 2008-09 period when the S&P lost more than 40%. Empirical has incorporated the Trefis HQ Portfolio into its asset allocation framework to provide clients with better returns and less risk compared to the benchmark index—a less turbulent ride, as shown in HQ Portfolio performance metrics.
| Returns | Mar 2025 MTD [1] |
2025 YTD [1] |
2017-25 Total [2] |
| TXN Return | -8% | -3% | 209% |
| S&P 500 Return | -5% | -4% | 153% |
| Trefis Reinforced Value Portfolio | -6% | -8% | 552% |
[1] Returns as of 3/18/2025
[2] Cumulative total returns since the end of 2016
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