This year, it feels as though semiconductors and everything related to them are the driving forces behind broader market upside. There’s no denying that investors are inundated with a steady stream of chip-related news and much of it is tied to the artificial intelligence (AI) trade.
One of the interesting things about the AI chip trade is that it’s sweeping in names beyond the usual suspects. For example, shares of Texas Instruments Inc. (TXN) are up by about 80% year-to-date. Aggressive traders can capitalize on this mature technology company’s renaissance with the Direxion Daily TXN Bull 2X ETF (TXNU).
Though not intended to be a long-term buy-and-hold asset, TXNU may be a prime example of a well-timed new ETF. The fund, which seeks daily returns corresponding to 200% of the performance of Texas Instruments stock, debuted in March as part of a quartet of additions to the Direxion suite of geared single-stock ETFs. Importantly, TXNU could be an ally to risk-tolerant traders over the remainder of 2026.
TXNU Has Catalysts
Although Texas Instruments is already up 80% this year, there’s belief that there is more gas in the stock’s tank. Of course this would also indicate that there are opportunities for traders to capitalize with TXNU. For example, last Friday, Seaport Research upgraded the stock to “buy” from “neutral” with a price target of $400. That implies significant upside from the $310 area at which the stock traded on May 22.
“Growing power demand and electrical intensity per rack is driving data centers to re-architect the way in which they distribute electricity,” noted Seaport analyst Jay Goldberg. “This is expected to prompt a surge in demand for power analog semis.”
Perhaps adding to the case for occasional use of TXNU in the months ahead, is the research firm’s forecast. It calls for an expansion of the total addressable market for the analog chips that Texas Instruments is one of the dominant purveyors of. The research firm sees that particular market ballooning to $15 billion by 2030, or triple its current size.
Seaport also noted that it’s possible there will be updates and “supply chain signals” in advance of Texas Instruments’ next earnings reports. This indicates that there may be chances for short-term traders to make use of the leveraged TXNU. Plus, the research firm isn’t alone in its bullish views on the chip stock.
“For existing data-center products, Texas Instruments is raising prices this year amid surging demand and tight supply, according to Mizuho Securities analyst Vijay Rakesh. The company’s data-center business grew about 90% year over year in the March quarter,” reported Nate Wolf for Barron’s.
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