The record Q2 guidance and $1.3B in contracted SiPho revenue for 2027 provide strong near-term visibility. Watch for sequential margin expansion through 2026 and updates on the Fab 7 restructuring in Japan. The stock may re-rate higher if the company sustains its growth trajectory toward the 2028 targets.
Price Chart
Executive Summary
Tower Semiconductor reported a strong Q1 2026 beat with EPS of $0.58 (GAAP basic) vs $0.56 consensus and revenue of $414M vs $411M consensus, driven by 15% YoY revenue growth and 96% YoY operating profit growth. The company issued record Q2 2026 revenue guidance of $455M (+22% YoY) and reaffirmed its 2028 target of $2.8B revenue and $750M net profit, supported by $1.3B in contracted silicon photonics revenue for 2027. S&P also raised its outlook to positive.
Key Financial Metrics
Key Facts
- Q1 2026 GAAP basic EPS $0.58 vs consensus $0.56 (beat by 3.6%)
- Q1 2026 revenue $414M vs consensus $411M (beat by 0.7%)
- Revenue grew 15% YoY to $414M from $358M
- Operating profit surged 96% YoY to $65M from $33M
- Q2 2026 revenue guidance of $455M (record high, +22% YoY, +10% QoQ)
- Company targets sequential revenue and margin growth throughout 2026
- 2028 financial model targets: $2.8B annual revenue and $750M net profit
- $1.3B of contracted silicon photonics revenue for 2027 from largest SiPho customers
- S&P Maalot reaffirmed 'ilAA' rating and raised outlook from stable to positive
- Operating cash flow of $510M included $290M in silicon photonics customer prepayments
Financial Impact
Q1 2026 revenue $414M (+15% YoY), operating profit $65M (+96% YoY), net profit $65M (+62% YoY); Q2 guidance $455M (record)
Risk Factors
- Execution risk on Fab 7 restructuring and 300mm capacity expansion
- Dependence on silicon photonics customer prepayments for cash flow
- GlobalFoundries patent infringement litigation (three claims pending)
- Geopolitical risks from Israel operations and potential trade restrictions
- Pillar Two tax rules may increase effective tax rate from 2026 onward
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 1 press release from GlobeNewswire.
| Document | Accession Number |
|---|---|
| PRESS-RELEASE Data (Synthetic) | press-3293855 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Oct 13, 2026 14d ago | 6-K | $209.16 $209.80 | ▲ +0.31% | ▲ +0.02% | $189.08 (−9.60%) |
Oct 13, 2026 14d ago | 6-K | $222.20 $209.16 | ▼ −5.87% | ▼ −4.79% | $189.08 (−14.91%) |
Oct 13, 2026 14d ago | 6-K | $222.20 $209.16 | ▼ −5.87% | ▼ −4.79% | $189.08 (−14.91%) |
Sep 23, 2026 4w ago | 6-K | $230.50 $217.28 | ▼ −5.74% | ▼ −5.65% | $189.08 (−17.97%) |
Sep 17, 2026 5w ago | 6-K | $219.24 $223.60 | ▲ +1.99% | ▲ +2.11% | $189.08 (−13.76%) |
Sep 15, 2026 6w ago | 6-K | $195.12 $203.72 | ▲ +4.41% | ▲ +4.08% | $189.08 (−3.10%) |
Aug 11, 2026 11w ago | 6-K | $249.58 $260.31 | ▲ +4.30% | ▲ +4.05% | $189.08 (−24.24%) |
Jul 14, 2026 15w ago | 6-K | $255.49 $251.00 | ▼ −1.76% | ▼ −2.15% | $189.08 (−25.99%) |
Jul 7, 2026 16w ago | 6-K | $211.93 $216.70 | ▲ +2.25% | ▲ +2.56% | $189.08 (−10.78%) |
Jul 7, 2026 16w ago | Press Release | $211.93 $216.70 | ▲ +2.25% | ▲ +2.56% | $189.08 (−10.78%) |
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