Why Is Tower Semiconductor Stock Soaring Thursday?

Tower Semiconductor Ltd. (NASDAQ:TSEM) stock surged about 8% Thursday after the chipmaker announced high-volume shipments of laser-integrated optical engine chips for artificial intelligence infrastructure.

The move outpaced the broader market. The Nasdaq gained 1.45%, while the S&P 500 rose 0.91%.

AI Optical Shipments Begin

Tower Semiconductor and NewPhotonics said Thursday they have begun high-volume shipments of laser-integrated, serviceable photonic integrated circuits, or PICs.

The chips target the growing need for faster and more energy-efficient optical connections in AI data centers. Current production supports data rates from 800G to 1.6T.

The companies also plan volume production of 6.4T solutions. Shipments of NewPhotonics’ NPC505 chipsets are expected to begin in the first half of 2027.

The products use Tower Semiconductor’s PH18DA silicon photonics platform. The technology integrates lasers, optical amplifiers, modulators and photodetectors on a single photonic chip. That approach can reduce manufacturing complexity while improving efficiency and reliability.

Technical Analysis

At $218.03, Tower Semiconductor was 3.6% above its 20-day simple moving average of $211.09. However, it remained 3.4% below its 50-day SMA of $226.41.

That makes the $226.50 area a key resistance level. A sustained move above it could strengthen the intermediate trend.

The longer-term picture remains stronger. Tower Semiconductor was 14.8% above its 200-day SMA of $190.52. However, the stock remains well below its 52-week high of $319.94.

The relative strength index stood at 51.65, a neutral reading. That suggests buying has not yet reached overextended levels.

The moving-average setup remains mixed. The 20-day SMA is below the 50-day SMA, signaling near-term weakness. However, the 50-day SMA remains above the 200-day SMA, supporting the longer-term trend.

Key resistance sits near $226.50, around the 50-day SMA. Support is near $184.50.

Analyst Outlook

Tower Semiconductor carries a Buy consensus rating and an average price forecast of $320.40.

Stifel initiated coverage with a Buy rating and a $270 price forecast on Sept. 2. Bank of America Securities initiated coverage with a Buy rating and a $367 forecast on Aug. 7. Benchmark maintained a Buy rating and raised its forecast to $335 on May 14.

Benzinga Edge

Tower Semiconductor scores strongly on momentum, quality and growth in the Benzinga Edge scorecard. Its momentum score is 97.04, while quality stands at 94.1 and growth at 78.64.

However, its value score is just 12.59, reflecting a relatively expensive valuation.

Price Action

Tower Semiconductor shares were up 8.05% at $218.48 at the time of publication Thursday, according to Benzinga Pro data.

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