QM · rank #13 · 2026-10-23
TSEM
NASDAQ · $19.04B (USD)
The exact numbers the algorithm saw.
| Momentum 12-1 Return from 12 months ago to 1 month ago. | +236.35% |
|---|---|
| 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. | $19.04B |
| Anchor (recent) Close on 2026-09-23 | $230.50 |
| Anchor (far) Close on 2025-09-23 | $68.53 |
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/RF/SiGe/silicon-photonics foundry serving AI data-center optical interconnect, power management, and image-sensor markets from fabs in Israel, the US, Japan, and Italy.
Rationale
Record Q2 revenue of $460M (+24% YoY), Q3 guidance implying 31% YoY growth, a 20% non-GAAP net margin, and a multi-year dedicated-capacity agreement with Semtech for 800G–3.2T optical interconnect collectively reinforce both the momentum signal and the quality screen simultaneously.
Material risks
- 1Customer concentration in AI optical connectivity (Semtech is the named anchor) means any qualification of an alternative SiGe/silicon-photonics foundry or in-house capacity build by a hyperscaler could rapidly deflate the dedicated-capacity premium that underpins the revenue ramp.
- 2The ~$3B Japan expansion (Q4 2027 readiness) and ~$920M SiGe/silicon-photonics capex create a multi-year funding and utilization overhang—if 1.6T/3.2T adoption or wafer demand lags, free cash flow turns sharply negative before the new capacity earns a return.
AI verdict council
Each pick is reviewed independently by 3 models before any order. 3 of 3 voted to proceed.