Tower Semiconductor (TSEM) Stock Forecast & Price Target

Tower Semiconductor Ltd demonstrated notable resilience and growth across its business segments, with the RF Infrastructure division achieving a 13% sequential growth and an impressive 60% annual increase in Q3. Specifically, the company's Silicon Photonics (SiPho) business emerged as a key driver, reporting a 250% annual increase in revenue for FY24 and projected to grow further to $215 million in FY25 and $300 million in FY26. Additionally, the Infrastructure business's robust performance is evident as it reached $241 million in FY24, marking a 69% annual growth and reflecting the company’s successful execution of its strategic goals amidst expanding demand in data centers and AI technologies.

Tower Semiconductor Ltd's stock outlook appears negative due to significant anticipated declines in its Mobile business, projected to decrease at a high-teens rate through FY25, primarily attributed to weaknesses in the Chinese Android market. Additionally, the company's gross margin has been adversely affected by a costly lease extension for its Newport Beach facility, which incurs $6 million in quarterly expenses for the next five years. Moreover, the forecast for RF-SOI revenue in 2025 suggests a decline of approximately 21% year-over-year, compounded by potential downward pressure on average selling prices for a range of electronic devices, which could further impact revenues.