Tower (TSEM) AI Stock Analysis

• Market Cap: $12.58B
• Dividend Yield: N/A
• Average Volume (3M): 1.96M
• Price to Earnings (P/E): 67.6
• Beta (1Y): 1.75
• Revenue Growth: 8.03%
• EPS Growth: -6.03%
• Country: US
• Employees: 5,613
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): 0.55
• Shares Outstanding: 111,756,620
• 10 Day Avg. Volume: 1,634,225
• 30 Day Avg. Volume: 1,962,086
• PEG Ratio: -0.46
• Price to Book (P/B): 2.16
• Price to Sales (P/S): 3.99
• P/FCF Ratio: 456.98
• Enterprise Value/Market Cap: 0.57
• Enterprise Value/Revenue: 4.74
• Enterprise Value/Gross Profit: 21.51
• Enterprise Value/Ebitda: 14.21
• 1Y Price Target: $128.80
• Price Target Upside: 10.38% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5
• EPS Forecast (FY): 2.18
• Revenue Forecast (FY): $1.57B

• Rating: 76 Outperform
• Price Target: $113.00 ▼(-3.16% Downside)

Tower Semiconductor's overall stock score reflects strong technical momentum and positive earnings call highlights, offset by high valuation concerns and cash flow challenges. The company's strategic investments and growth in key areas like RF infrastructure and silicon photonics are significant positives.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong market demand and effective business strategies, supporting long-term financial stability.

Strategic Investments

Strategic investments in high-demand technologies enhance competitive positioning and drive future revenue growth.

New Product Collaboration

Collaborations on new products expand market reach and address emerging technology needs, strengthening long-term growth prospects.

Negative Factors

Declining Profit Margins

Eroding profit margins can impact profitability and limit reinvestment capacity, challenging sustainable growth.

Fab Utilization Challenges

Underutilized facilities indicate inefficiencies that can increase costs and reduce operational leverage.

Increased Lease Costs

Higher lease costs elevate operational expenses, potentially squeezing margins and affecting cash flow.

Tower Business Overview & Revenue Model

Company Description

Tower Semiconductor Ltd., an independent semiconductor foundry, manufactures and markets analog intensive mixed-signal semiconductor devices in the United States, Japan, other Asia countries, and Europe. It provides various customizable process technologies, including SiGe, BiCMOS, mixed signal/CMOS, RF CMOS, CMOS image sensor, integrated power management, and MEMS. The company also offers wafer fabrication services and design enablement platform for design cycle, as well as transfer optimization and development process services to integrated device manufacturers and fabless companies. It serves various markets, such as consumer electronics, personal computers, communications, automotive, industrial, aerospace, military, and medical device products. The company was incorporated in 1993 and is headquartered in Migdal Haemek, Israel.

How the Company Makes Money

Tower Semiconductor generates revenue primarily through its foundry services, where it manufactures semiconductor products for third-party customers. The company operates on a business model that includes long-term contracts and agreements with major clients in various industries, which provide a steady stream of income. Key revenue streams include fees for manufacturing services, design services, and licensing of its proprietary technologies. Additionally, Tower benefits from strategic partnerships with leading technology companies, which enhance its market reach and capability to innovate, thereby contributing to its earnings. The company also participates in joint ventures and collaborations that enable it to expand its technology portfolio and access new markets.

Tower Financial Statement Overview

Summary

Tower demonstrates solid financial performance with strong revenue growth and a stable balance sheet. However, declining profit margins and negative free cash flow growth highlight areas for improvement.

Income Statement

Tower's income statement shows a strong performance with a consistent revenue growth trend, particularly in the TTM period with a 1.69% increase. The company maintains healthy margins, with a TTM gross profit margin of 22.39% and a net profit margin of 13.20%. However, there has been a decline in margins compared to previous years, indicating potential cost pressures or pricing challenges.

Balance Sheet

The balance sheet reflects a robust financial position with a low debt-to-equity ratio of 0.06 in the TTM period, indicating low leverage and financial stability. The return on equity is moderate at 7.29%, suggesting efficient use of equity to generate profits. The equity ratio stands at a healthy level, supporting the company's stability.

Cash Flow

Cash flow analysis reveals some concerns, particularly with the negative free cash flow growth rate of -3795.43% in the TTM period. The operating cash flow to net income ratio is strong at 1.65, indicating good cash generation relative to net income. However, the negative free cash flow to net income ratio suggests challenges in converting profits into free cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.51B	1.44B	1.42B	1.68B	1.51B	1.27B
Gross Profit	333.10M	339.44M	353.52M	466.31M	329.12M	233.32M
EBITDA	504.39M	451.32M	847.31M	590.30M	433.12M	335.97M
Net Income	195.48M	207.86M	518.49M	264.57M	150.01M	82.30M
Balance Sheet
Total Assets	3.25B	3.08B	2.92B	2.55B	2.23B	2.09B
Cash, Cash Equivalents and Short-Term Investments	1.22B	1.22B	1.24B	1.01B	763.87M	710.10M
Total Debt	164.09M	180.81M	231.56M	272.34M	314.84M	390.28M
Total Liabilities	420.02M	440.31M	491.48M	659.07M	615.85M	639.25M
Stockholders Equity	2.83B	2.65B	2.43B	1.89B	1.62B	1.46B
Cash Flow
Free Cash Flow	33.28M	12.53M	232.06M	163.42M	107.48M	-37.09M
Operating Cash Flow	456.76M	448.68M	676.56M	529.82M	421.29M	276.56M
Investing Cash Flow	-426.84M	-400.24M	-720.85M	-329.45M	-338.94M	-363.61M
Financing Cash Flow	-25.85M	-32.45M	-30.41M	-66.65M	-76.86M	-61.19M

Tower Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 116.69
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSEM, the sentiment is Positive. The current price of 116.69 is above the 20-day moving average (MA) of 112.17, above the 50-day MA of 95.17, and above the 200-day MA of 58.80, indicating a bullish trend. The MACD of 6.78 indicates Positive momentum. The RSI at 59.22 is Neutral, neither overbought nor oversold. The STOCH value of 20.81 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSEM.

Tower Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NVMI	81 Outperform	$9.19B	41.06	23.58%	―	39.37%	40.87%
TSEM	76 Outperform	$12.58B	67.63	7.19%	―	8.03%	-6.03%
AMKR	69 Neutral	$9.61B	31.32	7.27%	0.85%	0.13%	-16.17%
SMTC	69 Neutral	$6.21B	233.43	13.39%	―	20.60%	―
OLED	66 Neutral	$5.48B	24.82	13.30%	1.56%	-0.58%	-6.67%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
SITM	61 Neutral	$9.29B	-121.10	-7.88%	―	59.04%	28.50%

Tower Corporate Events

Tower Semiconductor to Participate in Barclays Global Technology Conference

On December 3, 2025, Tower Semiconductor announced its participation in the Barclays 23rd Annual Global Technology Conference, scheduled for December 10, 2025, at the Palace Hotel in San Francisco. This event will provide an opportunity for investors to engage directly with company representatives, potentially impacting Tower Semiconductor’s visibility and investor relations. The conference is a significant platform for the company to highlight its industry positioning and foster relationships with stakeholders.

Tower Semiconductor and Switch Semiconductor Unveil High-Efficiency Power Solution

On November 17, 2025, Tower Semiconductor announced a collaboration with Switch Semiconductor to introduce the SW2001, a high-efficiency buck regulator designed on Tower’s 65nm BCD platform. This product targets applications in servers, AI systems, and telecom infrastructure, promising up to 87% efficiency and reduced emissions. The collaboration marks a significant step in addressing the growing demands of next-generation computing and automation, with sampling set to begin in Q1 2026 and volume production later in the year.

Tower Semiconductor Expands 3D-IC Technology with New CPO Foundry

On November 12, 2025, Tower Semiconductor announced the expansion of its 300mm wafer bonding technology to support heterogeneous 3D-IC integration across its Silicon Photonics (SiPho) and SiGe BiCMOS processes. This advancement, supported by Cadence design tools, addresses the demand for compact, high-performance systems in data centers, enabling the integration of application-specific functions into a single high-density chip. The collaboration with Cadence enhances design capabilities, allowing for co-simulation and co-verification of multiple process technologies, thus reinforcing Tower’s leadership in 3D-IC and heterogeneous integration.

Tower Semiconductor Projects Record Q4 Revenue Amid Strategic Investments

On November 10, 2025, Tower Semiconductor announced its financial results for the third quarter of 2025, reporting a revenue of $396 million, a 6% increase from the previous quarter. The company also projected a record revenue of $440 million for the fourth quarter, driven by growth in its core technologies and investments in SiPho and SiGe capacity. Tower Semiconductor is investing an additional $300 million to expand its capabilities and extend its Newport Beach site lease, positioning itself for continued growth amid rising demand in the data center sector.

Tower Semiconductor to Announce Q3 2025 Financial Results

On October 15, 2025, Tower Semiconductor announced that it will release its third quarter 2025 financial results on November 10, 2025, followed by a conference call to discuss these results and provide guidance for the fourth quarter. The call will be webcast and available on the company’s Investor Relations website, with a replay accessible for 90 days. This announcement highlights Tower Semiconductor’s ongoing commitment to transparency and stakeholder engagement, potentially impacting its market positioning and investor relations.