Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Position Status | Return(%)* |
|---|---|---|---|---|---|---|---|---|
| 22 Jan, 26 | TSEM | Buy | USD 133.42 | USD 141.8 | USD 151.0 | 13 days | Closed |
10.96%
|
*Return(%) represent the percentage change between the entry price and exit price of the recommendation.
Data Powered by EOD Historical Data (“EODHD”).
Tower Semiconductor Ltd., an independent semiconductor foundry, focus on specialty process technologies to manufacture analog intensive mixed-signal semiconductor devices in Israel, the United States, Japan, Europe, and internationally. 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 provides design enablement platform for quick and accurate 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.
Improved Operating Profit Sequentially: Operating profit increased to USD 50.6 million in Q3 FY25, compared with USD 39.9 million in Q2 FY25, indicating operating leverage as volumes scale
RF Infrastructure Scale-Up: RF infrastructure revenue rose from USD 67 million (Q3 FY24) to USD 107 million (Q3 FY25), increasing segment contribution from 18% to 27% of total revenue
Rising Capital Intensity: Total committed CapEx for SiPho and SiGe expansion increased to USD 650 million, raising execution risk and near-term depreciation expense relative to Q3 FY24
Elevated Operating Expenses: R&D expenses increased to USD 22.1 million in Q3 FY25, from USD 19.9 million in Q3 FY24, driven by advanced SiPho and SiGe development programs
Tower Semiconductor’s investment case is exposed to execution and demand risk associated with large-scale SiPho and SiGe capacity expansion, where any slowdown in AI-driven data center demand or delays in fab ramp-up could materially pressure margins and returns on capital
| Entry Price | Support* | Target 1** | Target 2** |
|---|---|---|---|
| 133.42 | 118.8 | 141.8 | 151.0 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
**Target prices may vary by ±0.5% depending on market volatility.
Revenue Growth and Market Momentum: Tower Semiconductor delivered solid top-line growth in Q3 FY25, reporting revenue of USD 396 million, reflecting a year-on-year increase of approximately 7% compared with USD 370.5 million in Q3 FY24. This growth was driven primarily by strong demand across RF infrastructure, silicon photonics (SiPho), and silicon germanium (SiGe) platforms, underpinned by accelerating investments in AI-driven data center infrastructure.
Profitability and Earnings Performance: Net profit for Q3 FY25 stood at USD 54 million, broadly stable compared with USD 54.6 million in Q3 FY24, indicating resilience in earnings despite higher operating expenses and capacity ramp-related costs. Gross profit amounted to USD 93 million, maintaining a gross margin of approximately 24%, supported by the increasing mix of higher-margin SiPho and advanced RF solutions.
RF Infrastructure and Silicon Photonics Expansion: The RF infrastructure segment emerged as a key growth engine, increasing its contribution to total revenue from 18% in Q3 FY24 to 27% in Q3 FY25, translating to revenue growth from USD 67 million to USD 107 million. Silicon photonics revenue rose to USD 52 million, representing around 70% year-on-year growth, driven by strong adoption of 400G, 800G, and emerging 1.6T optical transceiver solutions.
Diversification Across Core Technology Platforms: RF Mobile continued to represent a stable revenue base at 26% of Q3 FY25 revenue, while Sensors and Display contributed 14%, supported by machine vision and OLED display backplane demand. Power Management accounted for 17% of revenue, benefiting from increased adoption of advanced 300mm platforms and growing exposure to data center power applications.
Manufacturing Utilization and Capacity Investments: During Q3 FY25, fab utilization remained mixed, reflecting ongoing repurposing toward infrastructure technologies. While the 300mm fab operated above the model utilization of 85%, certain 200mm fabs reported utilization in the 60–75% range, indicating near-term inefficiencies associated with capacity transition. To address future demand, the company announced an additional USD 300 million CapEx, bringing total SiPho and SiGe-related investments to USD 650 million.
Balance Sheet Strength and Liquidity Position: Tower Semiconductor maintained a robust balance sheet, with shareholders’ equity increasing to USD 2.83 billion as of September 2025, up from USD 2.64 billion at December 2024. Current assets totaled USD 1.78 billion, supporting a strong liquidity position that enables continued strategic investments without material balance sheet stress.
Forward Outlook and Strategic Positioning: Management guided Q4 FY25 revenue to USD 440 million ±5%, representing a projected 14% year-on-year increase, signaling confidence in sustained demand across core platforms. The company’s leadership in SiPho and SiGe technologies positions it favorably to capture long-term growth from AI infrastructure, high-speed networking, and advanced RF markets.
Technical Commentary: TSEM’s stock price found support at a key support zone and is now drifting higher, indicating a potential near-term upside. The 14-period RSI is above the mid-point, further supporting a positive bias. Additionally, the stock is trading above both its 21-period and 50-period simple moving averages, which could boost buying activity. Overall, these indicators suggest that bullish momentum is gaining strength, and if the current trend continues, the stock could experience further gains in the short term.
As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Buy’ rating has been given to Tower Semiconductor Ltd. (NASDAQ: TSEM) at its close market price of USD 133.42 as of January 21, 2026.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Technology Industry: Semiconductors
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| TSEM Tower Semiconductor Ltd |
19.61 7.34% | 286.74 | 8.52 | 18.52 | 2.58 | 1.44 | 2.42 | 7.49 |
| NVDA NVIDIA Corporation |
6.04 2.95% | 210.69 | 62.11 | 36.76 | 36.43 | 51.65 | 36.19 | 61.96 |
| AVGO Broadcom Inc |
18.45 4.70% | 411.35 | 78.55 | 35.84 | 27.93 | 23.69 | 28.47 | 52.08 |
| TSM Taiwan Semiconductor Manufacturing |
29.97 6.94% | 462.12 | 19.45 | 15.92 | 0.24 | 4.85 | 0.22 | 0.30 |
| AMD Advanced Micro Devices Inc |
24.89 4.86% | 537.37 | 108.58 | 40.98 | 13.39 | 7.12 | 12.75 | 60.70 |
Data Powered by EOD Historical Data (“EODHD”).
Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.
Related Risks: This report may be looked at from high-risk perspective and recommendations are provided are for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels as on January 22, 2026. The reference data in this report has been partly sourced from REFINITIV.
Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned has been achieved and is subject to the factors discussed above.
Note 4: StockNextt reports are prepared based on the stock prices captured either from REFINITIV or Trading View. Typically, REFINITIV or Trading View may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
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Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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