Want to see TSEM full AI Analyst Report?
Top Page
Tower
(NASDAQ:TSEM)
Select Model
Select Model
Rating:68Neutral
Price Target:
$289.00
â–²(28.90% Upside)
Action:Downgraded
Date:08/06/26
The score is supported by strong financial health (very low leverage and solid profitability) and a highly constructive earnings call with upgraded long-term targets and strong near-term guidance. These positives are tempered by clearly bearish technical signals (price below major DMAs and negative MACD) and a very high P/E with no dividend yield support.
Positive Factors
Silicon photonics growth and contracted demand
Rapid SiPho growth and substantial customer commitments provide durable visibility in AI and data-center connectivity, supporting future wafer volumes, capacity utilization and Tower’s specialty-foundry positioning.
Negative Factors
Capital intensity and uneven free cash flow
Large equipment and capacity investments can limit free-cash-flow conversion and create funding volatility, even with healthy operating cash flow. Returns therefore depend on timely qualification, utilization and commercial ramp execution.
Read all positive and negative factors
Positive Factors
Negative Factors
Silicon photonics growth and contracted demand
Rapid SiPho growth and substantial customer commitments provide durable visibility in AI and data-center connectivity, supporting future wafer volumes, capacity utilization and Tower’s specialty-foundry positioning.
Read all positive factors
Tower (TSEM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$25.25B
Dividend YieldN/A
Average Volume (3M)1.73M
Price to Earnings (P/E)88.0
Beta (1Y)1.65
Revenue Growth14.90%
EPS Growth45.52%
CountryUS
Employees5,613
SectorTechnology
Sector Strength88
IndustrySemiconductors
Share Statistics
EPS (TTM)2.55
Shares Outstanding112,824,940
10 Day Avg. Volume1,982,793
30 Day Avg. Volume1,728,946
Financial Highlights & Ratios
PEG Ratio16.17
Price to Book (P/B)4.59
Price to Sales (P/S)8.52
P/FCF Ratio-324.71
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$333.50Price Target Upside48.74% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
EPS Forecast (FY)3.83
Revenue Forecast (FY)$1.96B
Tower Business Overview & Revenue Model
Company Description
Tower Semiconductor Ltd. operates as a prominent independent semiconductor foundry, engaged in the worldwide production and sale of analog-intensive, mixed-signal semiconductor components. The company provides a comprehensive suite of customizable...
How the Company Makes Money
Tower makes money primarily by selling semiconductor wafer fabrication services (foundry revenue) to fabless semiconductor companies and integrated device manufacturers that outsource manufacturing. Customers pay for wafers produced using Tower’s ...
Tower Earnings Call Summary
Earnings Call Date:Aug 04, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 16, 2026
Earnings Call Sentiment Positive
The call presents a strongly positive operational and financial picture: record revenue, materially improved margins and EPS, rapid silicon photonics growth with large customer contracts, an aggressive but funded CapEx expansion plan (including METI-backed Japan projects), and a robust balance sheet. The primary risks are execution and timing of the large Track 2 expansion, model assumptions (selling prices, tool qualification timing, utilization), and near-term transitional impacts in RFSOI and certain fabs. These risks are significant but appear manageable given strong customer commitments, prepayments, supplier agreements, and cash position.Positive Updates
Record Quarterly Revenue
Revenue of $460.0M in Q2 2026, a company record; +11% quarter-over-quarter (vs $414M in Q1 2026) and +24% year-over-year (vs $372M in Q2 2025).
Negative Updates
RFSOI Transitional Revenue Decline
300mm RFSOI revenues decreased ~14% year-over-year as the RFSOI business transitions from 200mm to 300mm manufacturing and capacity is being reallocated to SiPho/SiGe.
Read all updates
Q2-2026 Updates
Positive
Negative
Record Quarterly Revenue
Revenue of $460.0M in Q2 2026, a company record; +11% quarter-over-quarter (vs $414M in Q1 2026) and +24% year-over-year (vs $372M in Q2 2025).
Read all positive updates
Company Guidance
Tower guided Q3 midrange revenue of $520 million (implying an annualized run rate above $2.0 billion) and updated its 2028 model to $3.6 billion in revenue with $1.63 billion gross profit (45% gross margin), $1.38 billion operating profit (38% operating margin) and $1.2 billion net profit (33% net margin) — a $760 million (27%) revenue upgrade versus the February model that adds $510M of gross profit (+67% on the incremental revenue), $480M of operating profit (+63%) and $450M of net profit (+59%). Key assumptions include ~85% fab utilization after CapEx qualifications, a $920 million CapEx plan (~50% paid to date), operating expenses falling to ~7% of revenue while R&D increases >40%, SiPho Q2 annualized run rate >$680M targeting $1.0B in Q4'26 with wafer-start capacity >3x Q2 levels (full financial effect by Q2'27), ~ $1.3B of SiPho 2027 customer contracts, Track 1 production readiness by Q4'27 and Track 2 delivering a >4x increase in Japanese 300mm output (targeting installation/functioning by Q4'28).Tower Financial Statement Overview
Summary
Income Statement
76
Positive
Balance Sheet
88
Very Positive
Cash Flow
70
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.71B | 1.57B | 1.44B | 1.42B | 1.68B | 1.51B |
| Gross Profit | 459.38M | 363.85M | 339.44M | 353.52M | 466.31M | 329.12M |
| EBITDA | 626.42M | 543.50M | 451.32M | 847.31M | 590.30M | 433.12M |
| Net Income | 289.58M | 220.47M | 207.86M | 518.49M | 264.57M | 150.01M |
Balance Sheet | ||||||
| Total Assets | 3.77B | 3.32B | 3.08B | 2.92B | 2.55B | 2.23B |
| Cash, Cash Equivalents and Short-Term Investments | 1.48B | 1.15B | 1.22B | 1.24B | 1.01B | 763.87M |
| Total Debt | 141.70M | 161.52M | 180.81M | 231.56M | 272.34M | 314.84M |
| Total Liabilities | 700.06M | 417.71M | 440.31M | 491.48M | 659.07M | 615.85M |
| Stockholders Equity | 3.09B | 2.90B | 2.65B | 2.43B | 1.89B | 1.62B |
Cash Flow | ||||||
| Free Cash Flow | 304.58M | -41.08M | 12.53M | 232.06M | 163.42M | 107.48M |
| Operating Cash Flow | 873.61M | 395.48M | 448.68M | 676.56M | 529.82M | 421.29M |
| Investing Cash Flow | -874.53M | -398.09M | -400.24M | -720.85M | -329.45M | -338.94M |
| Financing Cash Flow | -27.99M | -33.35M | -32.45M | -30.41M | -66.65M | -76.86M |
Tower Technical Analysis
Negative
224.21
Price Trends
243.97
Negative
236.88
Negative
180.25
Positive
Market Momentum
-0.63
Positive
44.51
Neutral
5.13
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSEM, the sentiment is Negative. The current price of 224.21 is below the 20-day moving average (MA) of 233.30, below the 50-day MA of 243.97, and above the 200-day MA of 180.25, indicating a neutral trend. The MACD of -0.63 indicates Positive momentum. The RSI at 44.51 is Neutral, neither overbought nor oversold. The STOCH value of 5.13 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSEM.
Tower Risk Analysis
Tower disclosed 43 risk factors in its most recent earnings report. Tower reported the most risks in the "Production" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Tower Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $3.98B | 20.68 | 11.35% | 2.40% | -8.32% | -19.36% | |
69 Neutral | $11.63B | -333.04 | -5.93% | ― | 14.22% | 81.01% | |
69 Neutral | $18.01B | 1,160.06 | 1.27% | ― | 83.03% | ― | |
68 Neutral | $25.25B | 88.01 | 9.82% | ― | 14.90% | 45.52% | |
68 Neutral | $12.20B | 45.03 | 20.25% | ― | 16.16% | 8.14% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
61 Neutral | $12.64B | 22.44 | 12.37% | 0.51% | 17.93% | 82.27% |
* Technology Sector Average
TSEM
Tower
222.59
165.02
286.64%
AMKR
Amkor
50.26
26.32
109.91%
NVMI
Nova
376.99
122.21
47.97%
SMTC
Semtech
124.09
73.09
143.31%
OLED
Universal Display
85.84
-54.56
-38.86%
SITM
SiTime Corporation
614.83
383.20
165.44%
Tower Corporate Events
Tower Semiconductor posts Q2 2026 interim results with rising assets and customer advances
Aug 17, 2026
On August 17, 2026, Tower Semiconductor filed a Form 6-K announcing it had released unaudited condensed interim consolidated financial statements as of June 30, 2026, covering the three- and six-month periods then ended. The filing also included m...
Tower Semiconductor to Engage Investors at August and September 2026 U.S. Conferences
Aug 12, 2026
On August 12, 2026, Tower Semiconductor announced that its representatives will take part in two upcoming investor conferences in the United States, underscoring the company’s outreach to the capital markets. Executives will attend the 2026 ...
Tower Semiconductor and OpenLight Integrate PH18DA Photonics PDK into Cadence Tools
Aug 11, 2026
On August 11, 2026, Tower Semiconductor and photonics specialist OpenLight announced that OpenLight’s photonic Process Design Kit is now available for Tower’s PH18DA indium phosphide-on-silicon photonics platform within Cadence’s...
Tower Semiconductor Posts Record Q2 2026 Results and Guides to New Revenue Highs
Aug 4, 2026
On August 4, 2026, Tower Semiconductor reported record financial results for the second quarter ended June 30, 2026, underscoring accelerating growth in its analog foundry business. Revenue rose 24% year over year to a record $460 million, while g...
Tower Semiconductor Launches $3 Billion Japan Expansion in Silicon Photonics and SiGe
Jul 14, 2026
On July 14, 2026, Tower Semiconductor announced a major dual-track capacity expansion in Japan for its 300mm silicon photonics, silicon germanium and advanced packaging operations, backed by financial support from the Japanese government. The init...
Tower Semiconductor Sets August 4 Date for Q2 2026 Results and Guidance Call
Jul 7, 2026
Tower Semiconductor announced on July 7, 2026, that it will release its second quarter 2026 earnings on August 4, 2026, underscoring its regular financial reporting cadence to investors. The company will host a conference call that same day to dis...
Tower Semiconductor Shareholders Reject Updated Executive Pay Policy at July Meeting
Jul 6, 2026
At its annual general meeting on July 2, 2026, Tower Semiconductor shareholders approved all agenda items except a proposal to adopt an amended and restated compensation policy for directors and executive officers. A quorum was present and the app...
Tower Semiconductor Seeks Shareholder Approval for Updated Executive Pay Policy After Rapid Growth
Jun 22, 2026
Tower Semiconductor has issued a June 22, 2026 letter to shareholders providing supplemental information ahead of its July 2, 2026 annual general meeting, focusing on changes to its compensation policy for directors and executives. The company hig...
Tower Semiconductor and Marvell Pass Five Million Coherent Photonic ICs for AI Data Centers
Jun 18, 2026
On June 18, 2026, Tower Semiconductor announced that it has shipped more than five million coherent photonic integrated circuits in partnership with Marvell Technology, marking a significant volume milestone in advanced optical components for AI-d...
Tower Semiconductor, IQE Sign Multi-year InP Epiwafer Deal and Settle IP Dispute
Jun 15, 2026
On June 15, 2026, Tower Semiconductor and IQE announced a multi-year agreement under which IQE will supply Indium Phosphide epiwafers for Tower’s advanced silicon photonics platforms targeting AI-driven data center optical connectivity. The ...
Tower Semiconductor Sets July 2, 2026 Shareholder Meeting to Vote on Board, Executive Pay and Auditor
May 21, 2026
Tower Semiconductor will convene its Annual General Meeting of Shareholders on July 2, 2026, at its Migdal Haemek headquarters, with shareholders of record as of May 26, 2026 eligible to participate and vote. The agenda includes electing ten direc...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.