Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Position Status | Return(%)* |
|---|---|---|---|---|---|---|---|---|
| 24 Apr, 26 | TSEM | Buy | USD 201.27 | USD 213.0 | USD 222.0 | 7 days | Closed |
11.01%
|
*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.
Net Profit Expansion: USD 220.5 Mn in FY25 vs USD 207.9 Mn in FY24
Revenue Growth: USD 1,566.1 Mn in FY25 vs USD 1,436.1 Mn in FY24
Increase in Operating Expenses: USD 169.7 Mn in FY25 vs USD 148.1 Mn in FY24
Increase in Cost of Revenue: USD 1,202.3 Mn in FY25 vs USD 1,096.7 Mn in FY24
The company faces risks related to dependency on high-growth SiPho demand cycles, execution challenges in large-scale capacity expansion, and potential volatility from customer concentration and semiconductor industry cyclicality
| Entry Price | Support* | Target 1** | Target 2** |
|---|---|---|---|
| 201.27 | 181.0 | 213.0 | 222.0 |
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.
Robust Growth Driven by Record Revenue and Profit Expansion: Tower Semiconductor reported a strong financial performance in Q4FY25, achieving record quarterly revenue of USD 440 million, reflecting a 14% year-over-year growth and 11% sequential increase. The company also delivered full-year revenue of USD 1.57 billion, marking a 9% increase compared to FY24. This steady top-line growth was supported by consistent quarterly revenue expansion throughout the year, highlighting sustained demand across its technology platforms.
Margin Expansion and Profitability Improvement: Profitability improved significantly during the period, with Q4FY25 net profit reaching USD 80 million, up from USD 54 million in Q3FY25, indicating strong operational leverage. The company achieved an 18% net margin in Q4FY25, reflecting a meaningful improvement from earlier quarters, supported by a favorable product mix and higher contribution from advanced technologies. For FY25, net profit stood at USD 220 million, compared to USD 208 million in FY24, demonstrating consistent bottom-line expansion.
Technology Mix Driving Value-Based Growth: The company’s performance was primarily driven by its high-value technology platforms, particularly silicon photonics (SiPho) and silicon germanium (SiGe). SiPho revenues more than doubled to USD 228 million in FY25 from USD 106 million in FY24, while combined SiGe and SiPho revenues reached USD 421 million. This shift toward higher-margin products significantly enhanced profitability and positioned the company for sustained value-driven growth.
Strong Demand from AI and Data Infrastructure Markets: Tower Semiconductor benefited from rising demand in AI-driven data infrastructure, particularly in RF infrastructure, which grew 75% year-over-year in FY25. Growth was fueled by hyperscaler adoption of silicon photonics for high-speed transceivers, alongside strategic collaborations, including partnerships aligned with NVIDIA. The company’s leadership in 1.6T silicon photonics solutions further strengthened its competitive positioning in next-generation compute bandwidth requirements.
Capacity Expansion and Strategic CapEx Investments: To capitalize on strong demand, the company announced total CapEx investments of USD 920 million, including an additional USD 270 million to expand SiPho and SiGe capacity. This expansion is expected to increase silicon photonics capacity by more than five times compared to Q4FY25 levels, with over 70% of capacity already reserved through 2028, backed by customer prepayments. This provides strong revenue visibility and reduces demand uncertainty.
Diversified Growth Across Key Business Segments: Beyond photonics, other segments also contributed to growth. Power management revenue increased 20% year-over-year, while sensors and displays grew 10%, reflecting broad-based demand across industrial, automotive, and consumer applications. However, lower-margin segments such as mixed-signal CMOS and discrete declined, aligning with the company’s strategy to optimize capacity toward higher-value offerings.
Long-Term Financial Model and Growth Outlook: The company introduced an updated financial model targeting USD 2.84 billion in revenue and USD 750 million in net profit by 2028, implying significant margin expansion and scalability. This reflects strong confidence in sustained demand, operational execution, and continued mix improvement. Additionally, Q1FY26 revenue guidance of approximately USD 412 million (+/-5%) indicates a 15% year-over-year growth trajectory entering the new fiscal year.
Considering recent key business, financial updates, current trading levels, and key business risks, a ‘Buy’ recommendation has been given to Tower Semiconductor Ltd. (NASDAQ: TSEM) at the closing market price of USD 201.27, as on 23 April,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 |
-6.89 2.94% | 227.21 | 8.52 | 18.52 | 2.58 | 1.44 | 2.42 | 7.49 |
| NVDA NVIDIA Corporation |
0.47 0.23% | 203.28 | 62.11 | 36.76 | 36.43 | 51.65 | 36.19 | 61.96 |
| AVGO Broadcom Inc |
7.33 1.98% | 378.16 | 78.55 | 35.84 | 27.93 | 23.69 | 28.47 | 52.08 |
| TSM Taiwan Semiconductor Manufacturing |
3.93 0.99% | 402.30 | 19.45 | 15.92 | 0.24 | 4.85 | 0.22 | 0.30 |
| AMD Advanced Micro Devices Inc |
7.81 1.58% | 503.57 | 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 April 24, 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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