Tower (TSEM) AI Stock Analysis

• Market Cap: $14.08B
• Dividend Yield: N/A
• Average Volume (3M): 2.02M
• Price to Earnings (P/E): 65.0
• Beta (1Y): 1.79
• Revenue Growth: 8.03%
• EPS Growth: -6.03%
• Country: US
• Employees: 5,613
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): 0.78
• Shares Outstanding: 111,756,620
• 10 Day Avg. Volume: 2,207,403
• 30 Day Avg. Volume: 2,023,851
• PEG Ratio: 11.32
• Price to Book (P/B): 4.59
• Price to Sales (P/S): 8.52
• P/FCF Ratio: -324.84
• Enterprise Value/Market Cap: 1.02
• Enterprise Value/Revenue: 9.15
• Enterprise Value/Gross Profit: 39.37
• Enterprise Value/Ebitda: 27.50
• 1Y Price Target: $157.94
• Price Target Upside: 25.38% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6
• EPS Forecast (FY): 2.98
• Revenue Forecast (FY): $1.88B

• Rating: 73 Outperform
• Price Target: $150.00 ▲(19.08% Upside)
• Action: Reiterated Date: 02/13/26
• Date: Action: Reiterated 02/13/26

The score is driven mainly by solid financial strength (notably the strong balance sheet) and supportive technical trend, reinforced by an upbeat earnings call focused on a funded, customer-supported SiPho/SiGe capacity ramp. These positives are tempered by premium valuation (high P/E) and the recent dip into negative free cash flow, plus execution/contract risks highlighted on the call.

Positive Factors

Balance Sheet Strength

Tower’s very low leverage and materially larger equity base provide durable financial flexibility to fund capital-intensive fab expansion, absorb cyclical semiconductor downturns, and support customer-backed investments without needing urgent external financing, lowering refinancing and solvency risk.

Funded SiPho/SiGe Capacity Build

A largely-funded $920M expansion with substantial pre-reservations converts capital spending into de-risked, contracted capacity. Customer prepayments and reservations enhance visibility into medium-term revenue, mitigate demand uncertainty and improve cash conversion when capacity comes online.

Strategic Partnerships & SiPho Leadership

Collaborations with leading infrastructure players (e.g., NVIDIA) validate Tower’s silicon-photonics tech and embed it into structural AI data-center demand. Rapid SiPho adoption and key alliances strengthen market position in high-growth optical interconnects and diversify end-markets beyond legacy mobile segments.

Negative Factors

Negative Free Cash Flow

Despite strong operating cash flow, negative free cash flow in 2025 reflects heavy capital intensity and working-capital pressure. Sustained negative FCF would erode liquidity cushions over time, increase reliance on the balance sheet, and constrain discretionary investment or shareholder returns if the ramp delays.

Ramp Execution & Qualification Risk

The business case for materially higher 2028 margins and revenue hinges on successful, timely tool qualifications across multiple fabs. Qualification delays or supplier issues would postpone revenue realization, depress utilization rates, and amplify per-wafer costs during the multi-year ramp.

Contractual Concentration Risk (Intel 11X)

A disputed third-party manufacturing agreement with Intel introduces structural counterparty and capacity planning risk. If lost or delayed, Tower may need to reallocate flows, incur incremental qualification costs or face underutilized capacity, reducing near-term revenue visibility and operational efficiency.

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

Financials are solid but uneven: a very strong, low-leverage balance sheet supports resilience, while profitability is healthy but has cooled from the 2023 peak. The main detractor is cash-flow quality in 2025, with free cash flow turning negative despite strong operating cash flow.

Income Statement

Revenue has grown from $1.27B (2020) to $1.57B (2025), with modest growth in 2025 (3.5%) after being nearly flat in 2024. Profitability is generally solid (2025 gross margin ~23% and net margin ~14%), but margins are down from 2022 levels and earnings power looks volatile given the unusually high 2023 profitability (net margin ~36%) that did not sustain into 2024–2025. Overall: healthy profitability with uneven trajectory and some margin compression.

Balance Sheet

The balance sheet is a clear strength: leverage is low and improving (debt-to-equity ~0.27 in 2020 down to ~0.06 in 2025), while equity has expanded meaningfully (to ~$2.90B in 2025). Returns on equity are positive but have normalized sharply from 2023’s spike (~21%) to mid/high-single digits in 2024–2025 (~8% to ~7.6%), suggesting less efficient capital returns recently despite the strong capital structure.

Cash Flow

Operating cash flow remains consistently strong (about $395M in 2025; generally $400M–$675M over 2021–2024) and continues to exceed net income (about 1.5x in 2025), supporting earnings quality. The weakness is free cash flow volatility: positive in 2021–2024 but turned negative in 2025 (about -$41M), indicating heavier investment or working-capital pressure and reducing near-term financial flexibility.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.57B	1.44B	1.42B	1.68B	1.51B
Gross Profit	363.85M	339.44M	353.52M	466.31M	329.12M
EBITDA	497.28M	451.32M	847.31M	590.30M	433.12M
Net Income	220.47M	207.86M	518.49M	264.57M	150.01M
Balance Sheet
Total Assets	3.32B	3.08B	2.92B	2.55B	2.23B
Cash, Cash Equivalents and Short-Term Investments	1.15B	1.22B	1.24B	1.01B	763.87M
Total Debt	161.52M	180.81M	231.56M	272.34M	314.84M
Total Liabilities	417.71M	440.31M	491.48M	659.07M	615.85M
Stockholders Equity	2.90B	2.65B	2.43B	1.89B	1.62B
Cash Flow
Free Cash Flow	-41.08M	12.53M	232.06M	163.42M	107.48M
Operating Cash Flow	395.48M	448.68M	676.56M	529.82M	421.29M
Investing Cash Flow	-398.09M	-400.24M	-720.85M	-329.45M	-338.94M
Financing Cash Flow	-33.35M	-32.45M	-30.41M	-66.65M	-76.86M

Tower Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 125.97
• 50DMA: Negative
• 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 Neutral. The current price of 125.97 is below the 20-day moving average (MA) of 132.09, below the 50-day MA of 126.23, and above the 200-day MA of 79.30, indicating a neutral trend. The MACD of -0.03 indicates Positive momentum. The RSI at 46.55 is Neutral, neither overbought nor oversold. The STOCH value of 20.33 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSEM.

Tower Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SITM	77 Outperform	$10.65B	-229.51	-4.62%	―	59.04%	28.50%
NVMI	74 Outperform	$14.46B	57.24	23.08%	―	39.37%	40.87%
TSEM	73 Outperform	$14.08B	65.02	7.93%	―	8.03%	-6.03%
OLED	70 Outperform	$5.01B	20.97	14.32%	1.52%	-0.58%	-6.67%
SMTC	69 Neutral	$8.34B	302.96	13.39%	―	20.60%	―
AMKR	68 Neutral	$12.00B	32.25	8.67%	0.81%	0.13%	-16.17%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Tower Corporate Events

Tower Semiconductor Partners with NVIDIA on 1.6T Silicon Photonics for AI Data Centers

On February 5, 2026, Tower Semiconductor announced a collaboration with NVIDIA to scale AI infrastructure using its advanced silicon photonics platform for 1.6-terabit data center optical modules designed for NVIDIA networking protocols. The new SiPho-based solution is said to double data rates versus prior silicon photonics generations, boosting bandwidth and throughput for optical connectivity and accelerating AI workloads in data centers, reinforcing Tower’s positioning as a key foundry partner for high-speed optical interconnects in AI infrastructure, data center networking and advanced telecom markets.

The most recent analyst rating on (TSEM) stock is a Buy with a $152.00 price target. To see the full list of analyst forecasts on Tower stock, see the TSEM Stock Forecast page.

Tower Semiconductor to Join Susquehanna 15th Annual Technology Conference in New York

On January 29, 2026, Tower Semiconductor announced that company representatives will attend the Susquehanna 15th Annual Technology Conference, scheduled for February 26 at the Lotte New York Palace Hotel in New York. The event will include one-on-one meeting opportunities with investors, underscoring Tower’s ongoing outreach to the investment community and its efforts to reinforce visibility and engagement in the technology and semiconductor capital markets.

The most recent analyst rating on (TSEM) stock is a Buy with a $144.00 price target. To see the full list of analyst forecasts on Tower stock, see the TSEM Stock Forecast page.

Tower Semiconductor Sets February 11 Release for Q4 and Full-Year 2025 Results

On January 20, 2026, Tower Semiconductor announced that it will release its fourth quarter and full-year 2025 financial results on February 11, 2026, and will host a conference call the same day to discuss those results and provide guidance for the first quarter of 2026. The webcasted call, which will be accessible via the company’s investor relations website with pre-registration required for dial-in participation and a 90-day replay period, underscores the company’s ongoing engagement with investors and other stakeholders ahead of an important earnings update that may shed light on its recent performance and near-term outlook in key analog semiconductor markets.

The most recent analyst rating on (TSEM) stock is a Buy with a $147.00 price target. To see the full list of analyst forecasts on Tower stock, see the TSEM Stock Forecast page.

Tower Semiconductor, LightIC Forge Silicon Photonics LiDAR Collaboration for Automotive and Physical AI

On January 5, 2026, Tower Semiconductor announced a strategic collaboration with LightIC Technologies to use Tower’s mature silicon photonics foundry platform to manufacture LightIC’s silicon photonics–based FMCW LiDAR products, including the Lark long-range automotive LiDAR and FR60 compact LiDAR for robotics and Physical AI applications. The partnership aims to extend silicon photonics beyond large-scale AI data-center networking into sensing-driven Physical AI and automotive markets, improving size, weight, power and cost while enabling scalable, velocity-aware 4D FMCW LiDAR solutions at a time when the global automotive LiDAR market is forecast to grow rapidly, positioning both companies to benefit from broader LiDAR adoption in automotive, industrial automation, smart infrastructure and robotics.

The most recent analyst rating on (TSEM) stock is a Hold with a $125.00 price target. To see the full list of analyst forecasts on Tower stock, see the TSEM Stock Forecast page.

Tower Semiconductor to Present at 28th Annual Needham Growth Conference in New York

On December 29, 2025, Tower Semiconductor announced that its representatives will attend the 28th Annual Needham Growth Conference in New York, scheduled for January 13–14, offering investors the chance to hold one‑on‑one meetings with the company. The participation underscores Tower’s efforts to engage actively with the investment community and highlight its analog foundry capabilities and global manufacturing footprint to current and prospective shareholders.

The most recent analyst rating on (TSEM) stock is a Buy with a $150.00 price target. To see the full list of analyst forecasts on Tower stock, see the TSEM Stock Forecast page.

Tower Semiconductor to Participate in Nomura’s CES Technology Conference

On December 9, 2025, Tower Semiconductor announced its participation in the Nomura’s CES Technology Conference, scheduled for January 5-6, 2026, in Las Vegas. This event will provide an opportunity for investors to engage in one-on-one meetings with company representatives, potentially enhancing investor relations and visibility in the technology sector.

The most recent analyst rating on (TSEM) stock is a Buy with a $113.00 price target. To see the full list of analyst forecasts on Tower stock, see the TSEM Stock Forecast page.

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.

The most recent analyst rating on (TSEM) stock is a Buy with a $113.00 price target. To see the full list of analyst forecasts on Tower stock, see the TSEM Stock Forecast page.

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.

The most recent analyst rating on (TSEM) stock is a Buy with a $113.00 price target. To see the full list of analyst forecasts on Tower stock, see the TSEM Stock Forecast page.