QM · rank #3 · 2026-09-09
TSEM
NASDAQ · $23.30B (USD)
The exact numbers the algorithm saw.
| Momentum 12-1 Return from 12 months ago to 1 month ago. | +423.64% |
|---|---|
| ROE TTM Return on equity, trailing 12 months. | +10.0% |
| Profit margin Net profit margin, trailing 12 months. | +16.9% |
| Market cap (USD) Size filter: > $500M required. | $23.30B |
| Anchor (recent) Close on 2026-08-10 | $252.55 |
| Anchor (far) Close on 2025-08-08 | $48.23 |
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 (TSEM) is a specialty foundry providing analog and mixed-signal semiconductor manufacturing services across RF, power, imaging, and SiGe process technologies to fabless and IDM customers globally.
Rationale
Record Q2 2026 revenue of $460M (+24% YoY) with 20% net margins and sequential acceleration directly validates both the momentum_12_1 signal of 4.24 and the quality metrics (ROE ~10%, profit margin ~17%), confirming the quality-momentum thesis is grounded in fundamental earnings power rather than sentiment alone.
Material risks
- 1Customer concentration risk — if a major customer (e.g., a large RF or imaging client) begins insourcing or shifts to a competing specialty foundry like GlobalFoundries or X-Fab, TSEM's utilization rates and margins could compress rapidly given its fixed-cost fab structure.
- 2Capex outpacing cash generation — Q2 2026 capex of $187M exceeded operating cash flow of $177M, meaning sustained expansion spending could pressure free cash flow and balance sheet flexibility if revenue growth decelerates even modestly.
AI verdict council
Each pick is reviewed independently by 3 models before any order. 3 of 3 voted to proceed.