BN · rank #2 · 2026-10-20
TSEM
NASDAQ · $22.64B (USD)
The exact numbers the algorithm saw.
| Composite score Z-score blend of the factors below; drives the rank. | 0.81 |
|---|---|
| Forward revenue growth Consensus forward revenue growth. | +37.9% |
| Forward net margin Consensus forward net margin. | +21.2% |
| Net margin TTM Trailing twelve month net margin. | +16.9% |
| Margin expansion Forward minus trailing net margin (percentage points). | +4.2% |
| Forward PEG Forward P/E to growth. Below 1 is cheap for the growth. | 3.43 |
| Debt / FCF Net debt relative to free cash flow. Lower is safer. | 0.47× |
| Analyst upside Spread between the consensus 12m target and the current price. | +56.2% |
| Last EPS surprise Most recent reported EPS versus consensus. | +14% |
| Market cap (USD) | $22.64B |
The AI research card
Independent qualitative review of each pick before the order is placed. On the rare day the research service is unavailable, the paper book trades on the quant ranking alone and no card appears here.
Summary
Tower Semiconductor is a specialty analog/mixed-signal foundry whose silicon photonics and SiGe processes are directly enabling the 800G/1.6T optical-interconnect buildout powering AI data centers.
Rationale
The bottleneck-solver thesis is concretely reinforced: SiPho revenue surged from a $180M to $680M annualized run rate in one year, Tower has a multi-year dedicated-capacity agreement with Semtech, and commercial high-volume shipments with NewPhotonics confirm the moat is operational, not speculative.
Material risks
- 1Tower is not a confirmed sole-source supplier — Semtech's dedicated-capacity deal provides demand visibility but leaves Tower exposed to dual-sourcing or customer design-win losses if Intel, GlobalFoundries, or an integrated optical player captures the 3.2T generation.
- 2The fwd PEG of 3.4 prices in near-perfection; Q3 guidance of $520M (±5%) has not yet been confirmed by reported results, and any miss or guidance cut would compress a premium multiple sharply given the 37.9% growth expectation already embedded.
AI verdict council
Each pick is reviewed independently by 3 models before any order. 3 of 3 voted to proceed.