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Tower
(NASDAQ:TSEM)
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Rating:68Neutral
Price Target:
$218.00
▼(-1.46% Downside)
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
Revenue and profit growth
Record revenue and sharply higher profit demonstrate strengthening demand across Tower’s specialty foundry platforms. If growth persists, greater scale can support reinvestment, improve operating leverage, and reinforce the company’s position in analog, RF, and mixed-signal manufacturing.
Negative Factors
Cyclical earnings stability
The normalization of margins after an unusually strong 2023 indicates that reported profitability can vary materially across semiconductor cycles. Such volatility may make earnings less predictable and could reduce the durability of returns even as recent revenue momentum improves.
Read all positive and negative factors
Positive Factors
Negative Factors
Revenue and profit growth
Record revenue and sharply higher profit demonstrate strengthening demand across Tower’s specialty foundry platforms. If growth persists, greater scale can support reinvestment, improve operating leverage, and reinforce the company’s position in analog, RF, and mixed-signal manufacturing.
Read all positive factors
Tower (TSEM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$21.52B
Dividend YieldN/A
Average Volume (3M)2.17M
Price to Earnings (P/E)72.9
Beta (1Y)1.71
Revenue Growth14.90%
EPS Growth45.52%
CountryUS
Employees5,613
SectorTechnology
Sector Strength88
IndustrySemiconductors
Share Statistics
EPS (TTM)2.55
Shares Outstanding113,517,670
10 Day Avg. Volume2,427,619
30 Day Avg. Volume2,172,140
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 Cap1.32
Enterprise Value/Revenue16.65
Enterprise Value/Gross Profit61.97
Enterprise Value/Ebitda45.35
Forecast
1Y Price Target
$313.67Price Target Upside41.78% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering7
EPS Forecast (FY)3.89
Revenue Forecast (FY)$1.97B
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 providing semiconductor wafer foundry services under contract to customers that design chips but outsource manufacturing. Revenue is generated mainly from: (1) Wafer fabrication (core stream): customers pay for proce...
Tower Earnings Call Summary
Earnings Call Date:Aug 04, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 02, 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 | 627.75M | 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
221.23
Price Trends
220.44
Negative
232.68
Negative
203.39
Negative
Market Momentum
-11.05
Positive
31.77
Neutral
10.28
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 221.23 is above the 20-day moving average (MA) of 220.44, above the 50-day MA of 220.44, and above the 200-day MA of 203.39, indicating a bearish trend. The MACD of -11.05 indicates Positive momentum. The RSI at 31.77 is Neutral, neither overbought nor oversold. The STOCH value of 10.28 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 |
|---|---|---|---|---|---|---|---|
76 Outperform | $49.41B | 19.13 | 20.98% | 2.02% | 9.07% | 104.71% | |
68 Neutral | $21.52B | 72.87 | 9.82% | ― | 14.90% | 45.52% | |
68 Neutral | $29.44B | 48.70 | 8.38% | ― | -3.14% | 44.55% | |
67 Neutral | $26.18B | 36.98 | 6.07% | 0.50% | 1.40% | ― | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
56 Neutral | $41.08B | 89.74 | 2.66% | 0.76% | 10.06% | -27.68% | |
45 Neutral | $98.15M | -3.08 | -12.72% | ― | -18.29% | 8.69% |
* Technology Sector Average
TSEM
Tower
167.71
92.78
123.82%
MX
MagnaChip
2.44
-0.65
-21.04%
ON
ON Semiconductor
73.23
21.45
41.43%
STM
STMicroelectronics
44.09
19.03
75.91%
UMC
United Micro
18.53
11.11
149.73%
GFS
GlobalFoundries Inc
43.37
8.34
23.80%
Tower Corporate Events
Tower Semiconductor Calls November Extraordinary Meeting to Approve Amended Executive Pay Policy
Oct 13, 2026
On October 13, 2026, Tower Semiconductor Ltd. reported that it will convene an Extraordinary General Meeting of Shareholders at its offices in Migdal Haemek, Israel, on November 25, 2026, at 3 p.m. local time. Shareholders of record as of the clos...
Tower Semiconductor, Semtech Extend SiGe Capacity Deal for AI Data Center Connectivity
Oct 13, 2026
On October 13, 2026, Tower Semiconductor and Semtech expanded their long-standing silicon germanium partnership with a new multi-year agreement to secure dedicated SiGe capacity for Semtech’s AI data center interconnect components. The deal ...
Tower Semiconductor Sets November 2 Release for Q3 2026 Results and Outlook
Oct 13, 2026
Tower Semiconductor, a major analog chip foundry listed on Nasdaq and TASE, said on October 13, 2026 it will report third-quarter 2026 results on November 2, 2026 and provide guidance for the fourth quarter. The company will host a webcast and tel...
Tower Semiconductor Sets November 2026 U.S. Symposium to Highlight AI and Connectivity Technologies
Sep 23, 2026
Tower Semiconductor announced on September 23, 2026 that it will hold its 2026 Technical Global Symposium in Santa Clara, California, on November 17, 2026, bringing together customers, partners and industry leaders to discuss AI infrastructure, hi...
Tower Semiconductor and NewPhotonics Launch High-Volume AI Optical Engine Shipments
Sep 17, 2026
On Sept. 17, 2026, Tower Semiconductor and NewPhotonics announced they had begun high-volume shipments of laser-integrated, serviceable optical engine photonic integrated circuits for AI interconnects. The chips, based on Tower’s PH18DA sili...
Tower Semiconductor to Showcase Silicon Photonics and SiGe Solutions for AI and Telecom at ECOC 2026
Sep 15, 2026
Tower Semiconductor announced on September 15, 2026 that it will participate in ECOC 2026, held September 21–23 in Malaga, Spain, to highlight its high‑volume silicon photonics and SiGe solutions. Company representatives will be availa...
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...
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.