AI stocks are moving, but this specialty chipmaker just erupted 47% this month — and the real growth story may only be beginning.
The company is Tower Semiconductor, ticker symbol TSEM, and it’s gaining attention with the stock up over 47% this month and 125% this year and after posting strong Q3 2025 results. Tower isn’t a flashy GPU maker — it’s a specialty analog and RF foundry that manufactures the chips powering AI data centers, 5G networks, and advanced optical communications. As the next wave of the AI boom moves from training chips to high-speed connectivity and power management, Tower’s niche is suddenly in high demand.
In its latest quarter, Tower reported $395.7 million in revenue, up roughly 7% year-over-year, and forecasted Q4 sales near $440 million, well above analyst expectations. The surge is being driven by record demand for RF and silicon photonics chips — key components that help AI servers move data faster and more efficiently. Management said SiPho revenue is growing nearly 70% year-over-year, and capacity is set to more than double in 2025 as new fabrication lines come online in Israel, Italy, and Japan.
Wall Street has started to notice. Benchmark recently raised its price target to $120, citing Tower’s expanding role in AI data center interconnects and 5G infrastructure. The company also announced a $300 million investment plan to expand SiGe and SiPho production capacity, signaling confidence that growth isn’t slowing anytime soon.
With accelerating demand, rising guidance, and sector momentum building again, TSEM could be one of the next major beneficiaries of the AI infrastructure cycle heading into 2026.
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