Topic: How To Invest

Wall Street Stock Forecaster Hotline – Friday, May 31, 2024

Article Excerpt

TEXAS INSTRUMENTS INC., $194.99, Nasdaq symbol TXN, is still a buy. The company is a leading maker of analog chips. Its products convert inputs, like touch, sound and pressure, into electronic signals that computers can understand. Texas Instruments is now building a new facility in Sherman, Texas, to house as many as four new chipmaking plants. In all, costs could reach $30 billion. To put that figure in context, the company’s market cap (the total value of all outstanding shares) is $177.5 billion. The new plants will use 300-millimetre wafers to make chips, which cost 40% less than the 200-millimetre wafers of its competitors. Activist investor Elliott Investment Management announced this week that it now controls $2.5 billion worth of Texas Instruments’ shares. Elliott wants Texas Instruments to scale back the construction of new plants, as it feels the future demand for those chips is not as strong as the company predicts. The activist claims that would increase its free cash flow (regular cash flow less…