Recommendation: Speculative Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Position Status | Return(%)* |
|---|---|---|---|---|---|---|---|---|
| 19 Aug, 25 | TSEM | Speculative Buy | USD 51.11 | USD 54.7 | USD 58.0 | 3 days | Closed |
7.02%
|
*Return(%) represent the percentage change between the entry price and exit price of the recommendation.
Data Powered by EOD Historical Data (“EODHD”).
Tower Semiconductor Ltd., an independent semiconductor foundry, focus on specialty process technologies to manufacture analog intensive mixed-signal semiconductor devices in Israel, the United States, Japan, Europe, and internationally. It provides various customizable process technologies, including SiGe, BiCMOS, mixed signal/CMOS, RF CMOS, CMOS image sensor, integrated power management, and MEMS. The Company also provides design enablement platform for quick and accurate design cycle, as well as transfer optimization and development process services to integrated device manufacturers and fabless companies. It serves various markets, such as consumer electronics, personal computers, communications, automotive, industrial, aerospace, military, and medical device products. The company was incorporated in 1993 and is headquartered in Migdal Haemek, Israel.
Operating Cash Flow: Improved from USD 113 million in Q2 FY24 to USD 123 million in Q2 FY25 (+9%)
Revenue Growth: Increased from USD 351 million in Q2 FY24 to USD 372 million in Q2 FY25 (+6%)
Gross Profit Decline: Fell from USD 86.9 million in Q2 FY24 to USD 80.0 million in Q2 FY25 (−8%)
Net Profit Decline: Decreased from USD 53.4 million in Q2 FY24 to USD 46.6 million in Q2 FY25 (−13%)
Tower Semiconductor faces significant risks from industry cyclicality, geopolitical instability in Israel, and potential underutilization of its expanded manufacturing capacity, which could materially impact future profitability
| Entry Price | Support* | Target 1** | Target 2** |
|---|---|---|---|
| 51.11 | 45.75 | 54.7 | 58.0 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
**Target prices may vary by ±0.5% depending on market volatility.
Revenue Performance: In the second quarter of fiscal year 2025, Tower Semiconductor reported revenues of USD 372 million. This represented a 6% increase compared with USD 351 million in the second quarter of 2024 and a 4% improvement over the previous quarter’s USD 358 million. The consistent revenue growth highlights the company’s ability to strengthen its position across key markets despite an uncertain macroeconomic backdrop.
Profitability Trends: Gross profit in Q2 FY25 stood at USD 80 million, down from USD 87 million in Q2 FY24 but higher than USD 73 million in Q1 FY25. The year-over-year contraction in gross profit indicates a rise in production and operational costs, which weighed on margins, while the sequential growth points to improved cost management and utilization in the short term.
Operating Results: Operating profit for the quarter was USD 40 million, a notable decline from USD 55 million in Q2 FY24, though an improvement from USD 33 million in Q1 FY25. This performance reflects higher R&D and SG&A costs compared to the prior year. The company continues to invest in innovation and market expansion, which has temporarily pressured operating margins.
Net Profitability: Net profit attributable to the company was reported at USD 46.6 million, equating to USD 0.42 in basic earnings per share. This marked a decline from USD 53.4 million, or USD 0.48 per share, in the prior-year quarter, but an increase from USD 40.1 million, or USD 0.36 per share, in Q1 FY25. Despite the year-over-year dip, the sequential improvement suggests stabilizing profitability momentum.
Cash Flow and Capital Expenditure: Tower generated USD 123 million in operating cash flow during Q2 FY25, compared to USD 113 million in Q2 FY24. Net investments in property and equipment stood at USD 111 million, relatively stable compared to USD 113 million in the year-ago period. The company continues to balance expansion-related investments with strong cash generation, supporting long-term growth capacity.
Outlook and Guidance: For the third quarter of 2025, Tower has guided revenues of approximately USD 395 million, with a range of plus or minus 5%. This forecast implies 7% year-over-year growth and 6% sequential growth, supported by customer demand in RF infrastructure, AI, and data center markets. Management also indicated an additional USD 40 million revenue increase targeted for the fourth quarter, underscoring confidence in near-term momentum.
Strategic Positioning: CEO Russell Ellwanger emphasized that repurposing multiple factories toward RF infrastructure capacity has begun to yield results. The company holds a leading market share in RF infrastructure and is well positioned to capitalize on AI and data center growth. With deep customer engagements and a strong innovation pipeline, Tower remains focused on creating long-term value for its stakeholders.
Technical Commentary:
TSEM's stock price has solidified strong support at key levels and is steadily climbing, indicating a potential for a short-term upward trend. The 14-period RSI remains above the midpoint, indicating increasing buying momentum. Moreover, the stock has regained its significant moving averages, which further supports a bullish outlook.
As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Speculative Buy’ rating has been given to Tower Semiconductor Ltd. (NASDAQ: TSEM) at its current market price of USD 51.11 as of Aug 19, 2025 (6:40 am PDT).
Data Powered by EOD Historical Data (“EODHD”).
Sector: Technology Industry: Semiconductors
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| TSEM Tower Semiconductor Ltd |
3.98 3.53% | 116.57 | 8.52 | 18.52 | 2.58 | 1.44 | 2.42 | 7.49 |
| NVDA NVIDIA Corporation |
2.74 1.60% | 173.68 | 62.11 | 36.76 | 36.43 | 51.65 | 36.19 | 61.96 |
| AVGO Broadcom Inc |
1.03 0.32% | 327.05 | 139.68 | 28.99 | 17.14 | 12.73 | 19.13 | 40.92 |
| TSM Taiwan Semiconductor Manufacturing |
7.56 2.73% | 284.52 | 19.45 | 15.92 | 0.24 | 4.85 | 0.22 | 0.30 |
| AMD Advanced Micro Devices Inc |
2.80 1.41% | 200.91 | 244.65 | 48.78 | 11.64 | 4.72 | 11.51 | 62.93 |
Data Powered by EOD Historical Data (“EODHD”).
Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.
Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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