Tower (TSEM) AI Stock Analysis

• Market Cap: $7.58B
• Dividend Yield: N/A
• Average Volume (3M): 1.50M
• Price to Earnings (P/E): 39.3
• Beta (1Y): 1.57
• Revenue Growth: 7.18%
• EPS Growth: -60.59%
• Country: US
• Employees: 5,613
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): 0.50
• Shares Outstanding: 111,756,620
• 10 Day Avg. Volume: 1,215,765
• 30 Day Avg. Volume: 1,503,450
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.51
• Enterprise Value/Revenue: 2.61
• Enterprise Value/Gross Profit: 11.65
• Enterprise Value/Ebitda: 7.95
• 1Y Price Target: $69.08
• Price Target Upside: 1.07% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6

• Rating: 73 Outperform
• Price Target: $61.00 ▼(-10.75% Downside)

Tower Semiconductor's overall stock score reflects strong financial performance and positive earnings call guidance, indicating growth potential. However, technical indicators suggest the stock may be overbought, and its high valuation could limit upside potential. The company's robust balance sheet and strategic focus on RF infrastructure and Silicon Photonics are significant strengths.

Positive Factors

Revenue Growth

Tower's projected revenue growth for the upcoming quarters indicates strong demand and effective strategic positioning, particularly in expanding sectors like RF infrastructure and Silicon Photonics.

RF Infrastructure Expansion

The significant growth in RF infrastructure revenues highlights Tower's competitive advantage and strategic focus in this high-demand sector, supporting long-term revenue stability.

Strong Financial Position

A robust balance sheet with high equity levels provides Tower with financial stability and flexibility to invest in growth opportunities, ensuring long-term sustainability.

Negative Factors

Cash Flow Management Challenges

Declining free cash flow growth poses a risk to Tower's ability to fund operations and investments internally, potentially impacting long-term financial health.

Underutilization of Facilities

Underutilization of key facilities may lead to inefficiencies and increased costs, potentially affecting Tower's profitability and operational effectiveness in the near term.

RF Mobile Business Weakness

Weakness in the RF mobile business indicates vulnerability to market fluctuations, which could hinder Tower's ability to capitalize on growth opportunities in this segment.

Tower Business Overview & Revenue Model

Company Description

Tower Semiconductor Ltd. (TSEM) is a leading foundry dedicated to manufacturing analog integrated circuits (ICs) and specialized semiconductor solutions. The company operates in various sectors, including automotive, consumer electronics, medical devices, and industrial applications. Tower offers a diverse range of products, including CMOS image sensors, RF and high-voltage ICs, and power management solutions, leveraging its advanced manufacturing technologies and expertise in process design to serve a global customer base.

How the Company Makes Money

Tower Semiconductor generates revenue primarily through its foundry services, which involve the fabrication of semiconductor devices for various customers. The company typically charges its clients for the manufacturing of ICs based on the complexity and volume of the orders. Key revenue streams include contracts with major semiconductor companies and partnerships with firms requiring specialized manufacturing capabilities. Additionally, Tower benefits from long-term agreements with clients, which provide revenue stability and predictability. The company also engages in joint ventures and collaborations, enabling it to expand its technological offerings and access new markets, further contributing to its earnings.

Tower Financial Statement Overview

Summary

Tower Semiconductor demonstrates strong financial health with consistent revenue growth and solid profitability margins. The balance sheet is robust, characterized by low leverage and efficient equity utilization. However, cash flow management poses a risk, with declining free cash flow growth requiring attention.

Income Statement

Tower's income statement shows a strong performance with a consistent revenue growth trend, particularly in the TTM period with a 1.42% increase. The company maintains healthy margins, with a gross profit margin of 23.18% and a net profit margin of 13.86% in the TTM. However, there is a slight decline in gross profit margin compared to previous years, indicating potential cost pressures.

Balance Sheet

The balance sheet reflects a solid financial position with a low debt-to-equity ratio of 0.06, indicating conservative leverage. The return on equity is stable at 7.74% in the TTM, showing efficient use of equity. The equity ratio is strong, suggesting a robust capital structure with a high proportion of equity financing.

Cash Flow

Cash flow analysis reveals challenges, with a significant decline in free cash flow growth rate (-91.51%) in the TTM. The operating cash flow to net income ratio remains healthy at 1.73, indicating good cash generation relative to net income. However, the negative free cash flow to net income ratio highlights potential cash management issues.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.49B	1.44B	1.42B	1.68B	1.51B	1.27B
Gross Profit	333.11M	339.44M	353.52M	466.31M	329.12M	233.32M
EBITDA	487.97M	451.32M	851.12M	594.75M	437.22M	331.56M
Net Income	196.48M	207.86M	518.49M	264.57M	150.01M	82.30M
Balance Sheet
Total Assets	3.20B	3.08B	2.92B	2.55B	2.23B	2.09B
Cash, Cash Equivalents and Short-Term Investments	1.21B	1.22B	1.24B	1.01B	764.65M	710.88M
Total Debt	176.10M	180.81M	231.56M	272.34M	314.84M	390.28M
Total Liabilities	428.97M	440.31M	491.48M	659.07M	615.85M	639.25M
Stockholders Equity	2.77B	2.65B	2.43B	1.90B	1.62B	1.46B
Cash Flow
Free Cash Flow	-1.06M	12.53M	232.06M	316.28M	107.48M	-37.09M
Operating Cash Flow	443.12M	448.68M	676.56M	529.82M	421.29M	276.56M
Investing Cash Flow	-412.55M	-400.24M	-720.85M	-329.45M	-338.94M	-363.61M
Financing Cash Flow	-35.48M	-32.45M	-30.41M	-66.65M	-76.86M	-61.19M

Tower Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 68.35
• 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 68.35 is above the 20-day moving average (MA) of 65.37, above the 50-day MA of 55.81, and above the 200-day MA of 46.21, indicating a bullish trend. The MACD of 3.84 indicates Positive momentum. The RSI at 67.46 is Neutral, neither overbought nor oversold. The STOCH value of 47.20 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	9.05B	41.95	19.81%	―	43.69%	51.22%
OLED	77 Outperform	6.98B	28.68	14.26%	1.20%	6.23%	10.12%
AMKR	76 Outperform	7.25B	23.95	7.24%	2.52%	-1.20%	-19.46%
TSEM	73 Outperform	$7.58B	39.29	7.41%	―	7.18%	-60.59%
SMTC	65 Neutral	5.19B	261.03	4.30%	―	22.22%	―
SITM	61 Neutral	7.64B	-84.44	-13.38%	―	65.12%	15.46%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Tower Corporate Events

Tower Semiconductor Launches 2025 Technical Global Symposium Series

On August 13, 2025, Tower Semiconductor announced the launch of its 2025 Technical Global Symposium Series, with events scheduled for September 16 in Shanghai and November 18 in Santa Clara. The symposiums will showcase Tower’s latest technologies and expertise in AI, high-speed connectivity, and other advanced domains, providing networking opportunities with industry leaders and insights into Tower’s capabilities in Silicon Photonics, SiGe, RF SOI, and more. This initiative underscores Tower’s commitment to innovation and strengthening partnerships with customers, potentially enhancing its market position and stakeholder engagement.

Tower Semiconductor and AIStorm Unveil Cheetah HS AI-in-Imager Chip

On August 12, 2025, Tower Semiconductor and AIStorm introduced the Cheetah HS, the world’s first AI-in-imager chip capable of capturing up to 260,000 frames per second. This innovative chip, designed for applications in inspection, robotics, and sports, combines ultra-high-speed imaging with charge-domain AI to significantly reduce system power requirements and costs. The collaboration leverages Tower’s charge-domain imaging platform and AIStorm’s analog AI neurons, offering a cost-effective solution for a wide range of consumer and industrial applications, marking a significant advancement in the semiconductor industry.

Tower Semiconductor Engages with Investors at August and September Conferences

On August 7, 2025, Tower Semiconductor announced its participation in several investor conferences in August and September. These include the Needham 6th Annual Virtual Semiconductor and SemiCap 1×1 Conference, the Jefferies Semiconductor, IT Hardware and Communications Technology Conference, the Evercore ISI 2025 Semiconductor, IT Hardware and Networking Conference, the Benchmark 12th Annual Tech, Media and Telecom 1×1 Conference, and the Jefferies TechTrek 2025 Conference. These events provide opportunities for investors to engage with company representatives, potentially impacting Tower Semiconductor’s visibility and stakeholder engagement.

Tower Semiconductor Reports Strong Q2 2025 Financial Results

On August 4, 2025, Tower Semiconductor announced its financial results for the second quarter of 2025, reporting a revenue of $372 million, which marks a 6% increase year-over-year and a 4% rise quarter-over-quarter. The company also highlighted a net profit of $47 million for the quarter. Tower Semiconductor’s strategic initiatives, including the repurposing of factories for increased RF infrastructure capacity, have contributed to its growth, with further revenue increases projected for the third and fourth quarters of 2025. This positions the company strongly within its industry, particularly in the RF infrastructure market, driven by data centers and AI expansions.

Tower Semiconductor Honored with Best Supplier Award by Wisol

On July 30, 2025, Tower Semiconductor announced that it received the Best Supplier Award from Wisol for excellence in RF SOI technology and supply chain support. This recognition highlights Tower’s strong partnership with top-tier vendors and its commitment to delivering stable, timely, and technologically advanced solutions. The award underscores Tower’s position as a trusted global foundry partner, particularly in the mobile, IoT, and automotive markets, where its 300mm RF SOI platform plays a crucial role in producing high-performance RF front-end ICs. The collaboration with Wisol, including support for companies like Samsung Electronics, demonstrates Tower’s ability to meet demanding performance and delivery requirements.

Tower Semiconductor to Announce Q2 2025 Financial Results on August 4

On July 14, 2025, Tower Semiconductor announced its plans to release the second quarter 2025 financial results on August 4, 2025. The company will also host a conference call to discuss these results and provide guidance for the third quarter of 2025. This announcement underscores Tower Semiconductor’s ongoing commitment to transparency and stakeholder engagement, as it continues to position itself as a leader in the analog semiconductor industry.

Tower Semiconductor Wins Prestigious Award at IMS 2025

On July 8, 2025, Tower Semiconductor announced that it, along with pSemi, won the Industry Paper Competition Award at the 2025 IEEE International Microwave Symposium (IMS) for their paper on a low-loss, wideband RF switch. The paper, presented on June 19, 2025, highlights significant advancements in RF switch technology, demonstrating superior bandwidth, insertion loss, power handling, and linearity. This achievement underscores Tower’s leadership in RF front-end innovation and strengthens its position in the market for advanced wireless device integration, benefiting stakeholders by simplifying implementation for 5G, 6G, SatCom, beamforming, and millimeter-wave applications.