Tower Semiconductor Eyes Strong Growth As RF Infrastructure Momentum Builds

Tower Semiconductor (NASDAQ: TSEM) stock gained after it reported fiscal second-quarter results on Monday.

The company reported a quarterly revenue growth of 6% year-on-year (Y/Y) to $372.06 million, compared to the analyst consensus estimate of $370.23 million.

The Israel-based contract chipmaker’s adjusted EPS of 50 cents beat the analyst consensus estimate of 45 cents.

Also Read: Tower Semiconductor Adapts To Nvidia’s Architectural Shift, Analyst Sees Growth In AI Optical Networks

Gross profit was $80 million, down 7.9% Y/Y. The margin declined to 21.5% from 24.8% Y/Y. Operating profit of $39.9 million decreased 27.7% Y/Y.

During the quarter, the company generated $123 million in operating cash flow and held $1.21 billion in cash and equivalents.

Tower Semiconductor CEO Russell Ellwanger credited the company’s ongoing strategic initiatives, particularly the repurposing of multiple factories to expand RF (Radio Frequency) infrastructure capacity, with supporting recent gains and setting the stage for continued growth in the coming quarters.

He noted that driven by rising demand from data centers and AI expansion, Tower has built strong momentum in its RF infrastructure business, backed by growing customer forecasts and reinforced by its leading market share. The company expects to maintain this trajectory, with third-quarter revenue guidance set at $395 million and a targeted $40 million increase in the fourth quarter.

Outlook

Tower Semiconductor expects third-quarter revenue of $375.25 million-$414.75 million compared to the $394.54 million analyst consensus estimate.

TSEM Price Action: TSEM stock is trading higher by 7.95% to $48.22 at last check Monday. 

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