Texas Instruments posted higher-than-expected quarterly results on Monday after the bell. Does the stock have further room to run? Adam Benjamin, managing director at Jefferies & Company, shared his insights.
“They saw broad-based strength,” Benjamin told CNBC.
“The key is that they are a good proxy for the recovery continuing.”
Benjamin said the chipmaker didn’t see any cancellations from their customers, which was a positive sign.
“This is a secular recovery that’s continuing and broad-based—they are bringing back the back-end capacity, which is allowing them to serve their customers better,” he said.
“The 300 mm [chip] is a big driver to late this year into next year and a reason to own the stock going forward.”
The stock is also relatively cheap versus its peers, said Benjamin.
“Given where inventories went and given the supply chain being lean, those investors that were bearish on the semiconductor cycle should be feeling more confident about the lack of cancellations and strong order patterns,” he said. “So the strength should continue here.”
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Benjamin does not own shares of TXN.