| Factor | Score | Distribution | Value | Avg | Rank |
|---|---|---|---|---|---|
Valuation | 11 | 88.4x | 17.6x | Bottom tier | |
Growth | 74 | 14.9% | 7.1% | Top tier | |
Quality | 36 | 7.9% | 4.5% | Bottom tier | |
Safety | 53 | — | 2.6x | Around median | |
Capital Return | 70 | — | 2.15% | Top tier | |
Momentum | 82 | 266.1% | 2.3% | Top tier | |
Sentiment | 41 | 4 | 3 | Around median |
Estimates — analyst targets and a simplified DCF, not investment advice.
Ten ratios that matter, each compared against its sector median and average — so you can see whether a number is rich or cheap relative to peers in the same sector.
Tower Semiconductor operates as a specialty semiconductor foundry, generating revenue from manufacturing technologies including silicon photonics SiPho, Silicon Germanium, RFSOI solutions for mobile communications, power management, and image sensors. In Q2 fiscal year 2026, RF infrastructure accounted for 49% of revenue, power management 14%, mobile communications 12%, and sensors and displays 12%, making optical connectivity and AI data center applications the largest driver of the current mix.
The company reported record revenue of $460 million in Q2 fiscal year 2026, up 24% year over year and 11% quarter over quarter. Gross profit reached $138 million at a record gross margin of 30%, operating profit was $90 million at a 20% margin, and net profit reached $91 million at a 20% margin, compared with $47 million in Q2 fiscal year 2025. GAAP earnings per share were $0.80 basic and $0.79 diluted, while adjusted earnings per share were $0.88, exceeding analysts' expectations of $0.67.
On an annual basis, fiscal year 2025 revenue rose to $1.6 billion from $1.4 billion in fiscal year 2024, and net income increased to $220.5 million from $207.9 million. However, fiscal year 2025 gross profit of $363.9 million remained below the $466.3 million recorded in fiscal year 2022, illustrating that the significant improvement in Q2 fiscal year 2026 margins represents an important operational shift that needs to continue through the new capacity expansions.
The analyst consensus is Buy, with an average price target of $315 and a relatively narrow target range between $300 and $330. The average is close to the upper end of the 52-week range of $319.94, compared with a low of $56.54, reflecting a significant revaluation tied to accelerating SiPho growth and improving margins, but it increases the stock's sensitivity to any shortfall against Q3 fiscal year 2026 guidance or the ambitious 2028 model.
Figures in the text are as of 2026-08-28; the live price is shown at the top of the page.
Revenue reached $460 million, up 24% annually and 11% quarterly, driven particularly by RF infrastructure and silicon photonics. SiPho revenue grew by more than 270% annually, while RF infrastructure represented 49% of total revenue. The stronger mix and operating leverage resulted in a 30% gross margin and net profit of $91 million, up 95% from Q2 fiscal year 2025.
The contracts represent approximately $1.3 billion in SiPho revenue for 2027 and are supported by $290 million in advance payments received by Tower in Q1 fiscal year 2026, most of which was for reserving 2027 capacity. Management says the additional Track 1 capacity is required and committed by several key customers, and that planned wafer starts could support capacity exceeding three times Q2 fiscal year 2026 shipments. However, management clarified that not all available capacity consists of final reservations, even if it is effectively allocated to customer demand.
The company guided to midpoint revenue of $520 million in Q3 fiscal year 2026, equivalent to an annualized revenue run rate exceeding $2 billion. The 2028 model targets revenue of $3.6 billion, gross profit of $1.63 billion at a 45% margin, and operating profit of $1.38 billion at a 38% margin. The model also targets net profit of $1.2 billion and a net margin of 33%, but assumes fabs operate at 85% and that qualification succeeds within the assumed schedules, prices, and costs.
Automated analysis for informational purposes only — not investment advice.
Track 1 targets the repurposing of the Arai facility and an increase in Fab 7 production, with full production readiness expected in Q4 fiscal year 2027. Track 2 targets a fourfold increase in Japanese 300-millimeter capacity, with a primary focus on SiPho followed by Silicon Germanium, and equipment operation planned by Q4 fiscal year 2028. Management indicated a targeted minimum of between 20,000 and 25,000 SiPho wafers per month within the long-term expansion, with the potential to rise above that level.
Silicon photonics is the fastest-growing driver, but it is not the only business; power management represented 14% of Q2 fiscal year 2026 revenue, while mobile communications and sensors and displays each represented 12%. Management expects 300-millimeter RFSOI wafer starts to triple by mid-2027 compared with Q2 fiscal year 2026 shipments. It also sees growing demand for machine-vision sensors used to inspect DDR and HBM lines and electric vehicle batteries during the two years following the August 4, 2026 call.
The model depends on achieving fab utilization of 85%, maintaining wafer selling prices, controlling costs, and completing tool installation and the qualification of processes and customer products on schedule. The final schedule for installing and qualifying Track 2 tools was still being completed according to the August 4, 2026 call, while approximately half of the $920 million capital expenditure program remains to be paid during the second half of fiscal year 2026 and fiscal year 2027. Risks also include capacity expansions by competitors such as GlobalFoundries, STMicro, and Samsung, alongside a 14% annual decline in 300-millimeter RFSOI revenue during the manufacturing transition.
