Tower Semiconductor Ltd. (NASDAQ:TSEM) reported stronger-than-expected second-quarter results and issued upbeat third-quarter guidance.

The Israel-based chip foundry posted second-quarter revenue of $460.08 million, up 24% from a year earlier and ahead of analysts’ estimates of $454.68 million. Adjusted earnings came in at 88 cents per share, topping Wall Street expectations of 76 cents per share.

The Nasdaq is up 2.55% while the S&P 500 has gained 1.28%.

• Tower Semiconductor stock is among today’s top performers. Why is TSEM stock surging?

Tower Semiconductor Profit Growth and Margin Expansion

Gross profit increased 72% year over year to $137.77 million, while gross margin expanded to 29.95% from 21.51% a year earlier.

Operating profit rose 2.3 times year-over-year to $90.29 million.

Operating cash flow surged to $177 million from $123 million in the prior-year quarter. Tower Semiconductor ended the quarter with $231.19 million in cash and cash equivalents as of June 30, 2026.

Tower Semiconductor Outlook

Tower Semiconductor forecast third-quarter revenue of $494 million to $546 million, compared with analysts’ estimates of $490.016 million.

SiPho Growth Supports Tower’s Outlook

Tower Semiconductor CEO Russell Ellwanger said strong demand across the company’s key business units helped Tower deliver record revenue and record profitability while expanding technology leadership and manufacturing capacity in 2026.

Ellwanger said Tower recently announced additional major capacity expansions to support growing customer demand. He said SiPho revenue reached a $680 million annual run rate in the second quarter of 2026, up from a $180 million annual run rate in the second quarter of 2025.

He said Tower plans to exceed a $1 billion SiPho revenue annual run rate in the fourth quarter of 2026, with continued strong growth expected through 2027.

Ellwanger said Tower raised its 2028 target business model to $3.6 billion in revenue and $1.2 billion in net profit, supported by customer commitments. He said deep strategic customer relationships are driving sustainable growth for both Tower and its customers while increasing shareholder value.

Technical Analysis

From a trend perspective, the stock is still holding a bullish long-term posture, trading 36% above its 200-day SMA ($169.57). But the intermediate trend is less clean: TSEM is trading 7.2% below its 50-day SMA ($248.38), and the 20-day SMA remains below the 50-day SMA, a bearish crossover that often caps rebounds.

TSEM Price Action: Tower Semiconductor shares were up 3.03% at $241.42 at the time of publication on Tuesday, according to Benzinga Pro data.

Photo: Shutterstock

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