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TSEM · Analysis updated Nov 10, 2026, 6:00 PM ET
Why is Tower Semiconductor Ltd (TSEM) stock moving?
Tower posted record Q3 2026 results on Nov 2: adjusted EPS of $1.15 vs $1.08 expected, sales of $526M vs $520M, and record net profit of $120M. Q4 guidance of $570M-$630M sits above the $574.7M consensus, and management targets a $1.1B annualized silicon photonics run rate in Q4. The stock nonetheless fell from $166.48 (Oct 30) to $155.32 (Nov 2) and from $187.92 (Oct 29) to $130.99 (Nov 5), with the Oct 30 drop on 6.0M shares before results. The Nov 3 price-target updates kept ratings intact but cut targets: Wedbush $190 (Neutral), Stifel $235 (Buy), Susquehanna $305 (Positive). The shares recovered to $152.29 on Nov 9 on 3.95M shares (+7.0%) and closed at $147.60 on Nov 10, still about 24% below the Oct 28 close of $193.52. The Keysight certification and Innolight near-package optics collaboration support the photonics roadmap but add little near-term financial visibility. Overall, fundamentals and guidance are strong, while the price has not yet recovered and analysts have trimmed targets.
News behind the analysis
- Keysight Certifies Advanced Design System Photonic Designer for Tower Semiconductor's PH18 PDKKeysight certified its ADS Photonic Designer software for Tower's PH18 silicon photonics process design kits. This is an incremental ecosystem item with no direct financial figures.
- Wedbush Maintains Neutral on Tower Semiconductor, Lowers Price Target to $190Wedbush kept its Neutral rating and cut its price target to $190 after the Q3 report.
- Susquehanna Maintains Positive on Tower Semiconductor, Lowers Price Target to $305Susquehanna kept its Positive rating and lowered its price target to $305.
- Stifel Maintains Buy on Tower Semiconductor, Lowers Price Target to $235Stifel kept its Buy rating and lowered its price target to $235.
- CORRECTION: Tower Semiconductor Sees Q4 Sales $570.000M-$630.000M vs $574.727M EstTower guided Q4 sales to $570M-$630M, with the midpoint of $600M above the $574.7M consensus estimate.
- Tower Semiconductor Reports Record Third Quarter 2026 Financial ResultsTower reported record Q3 2026 revenue of $526M and guided Q4 revenue to $600M, with annual 2026 revenue of about $2B.
- Tower Semiconductor Q3 Adj. EPS $1.15 Beats $1.08 Estimate, Sales $526.161M Beat $520.157M EstimateQ3 adjusted EPS of $1.15 and sales of $526.2M both beat consensus. Net profit reached a record $120M versus $54M a year earlier.
- Tower Semiconductor Targets $1.1B Annualized SiPho Revenue Run Rate In Q4, 5x 2025 LevelTower targets an annualized silicon photonics revenue run rate of $1.1B in Q4, about five times the 2025 level.
- Tower Semiconductor Says Japan 300mm Buildout Ahead Of Schedule; Customer Contracts Extended Through 2029Tower said its Japan 300mm buildout is ahead of schedule and that customer contracts have been extended through 2029.
About Tower Semiconductor Ltd
Tower Semiconductor is an Israeli contract chipmaker (foundry) based in Migdal HaEmek. Its shares trade on Nasdaq and the Tel Aviv exchange. Instead of designing its own chips, it makes specialty analog chips for other companies, using technologies like silicon photonics, silicon-germanium (SiGe), RF, power management and image sensors. Silicon photonics, used in optical links inside AI data centers, has become its fastest-growing business.
How it makes money
Tower earns money by making wafers for chip designers. Customers pay for production on its specialty manufacturing processes. It runs fabs in Israel and the US, has a majority stake (about 51%) in a joint venture with fabs in Japan, and shares capacity at STMicroelectronics' 300mm fab in Italy. Sales are rising fast, with quarterly revenue of about $526 million in Q3 2026, and they increasingly come from infrastructure customers. Most of that is silicon photonics and SiGe parts for high-speed optical connectivity. Some photonics customers have also paid large amounts upfront to reserve capacity.
What usually moves TSEM
- AI data-center spending on optical transceivers
- Silicon photonics capacity ramp and customer prepayments
- Fab utilization and gross margins
- Demand for analog, RF, power and sensor chips in autos, industrial and mobile
- Geopolitical risk in Israel and currency moves