---
title: "Short sellers nearly doubled bets against Tower Semiconductor, then the stock fell 14.5%; Nov. 2 settles it"
description: "Short interest in the AI-optics foundry jumped 68.8% to 4.57 million shares in the two weeks to September 30, 2026, before the Semtech capacity deal and a 14.5% weekly slide to $195.58. The November 2 third-quarter print decides whether the ramp or the multiple wins."
publisher: "The Inference"
section: "Markets"
published: 2026-10-18T15:13:47.274Z
modified: 2026-10-18T15:13:47.274Z
canonical: https://theinference.org/article/short-sellers-nearly-doubled-bets-against-tower-semiconductor-then-the-stock-fell-14-5-nov-2-settles-it
language: en
keywords: "Short Interest, Semiconductors, AI Infrastructure, Insider Selling, Markets"
---

# Short sellers nearly doubled bets against Tower Semiconductor, then the stock fell 14.5%; Nov. 2 settles it

> Short interest in the AI-optics foundry jumped 68.8% to 4.57 million shares in the two weeks to September 30, 2026, before the Semtech capacity deal and a 14.5% weekly slide to $195.58. The November 2 third-quarter print decides whether the ramp or the multiple wins.

## The shorts moved first, the price followed

Between September 15 and 30, 2026, short interest in [Tower Semiconductor](https://theinference.org/markets/companies/tower-semiconductor) (NASDAQ: TSEM) [rose 68.8%, from 2,705,350 shares to 4,567,523](https://www.marketbeat.com/instant-alerts/options-tower-semiconductor-ltd-nasdaq-tsem-stock-short-interest-rises-688-2026-10-16/), about 4.1% of the shares outstanding and 1.9 days to cover [1]. This week the stock repriced: [down 6.8% to $195.58 on October 16 and 14.5% for the week](https://www.gurufocus.com/news/9128445/a-look-at-tower-semiconductor-ltd-tsem-after-68-decline-gf-value-5887-vs-price-19558), inside a 52-week range of $71.64 to $319.94 [2]. The bet was on before the news that argues against it.

## A customer signed for capacity, the chief executive sold

On October 13, 2026, Tower and [Semtech](https://theinference.org/markets/companies/semtech) (NASDAQ: SMTC), an AI data-center networking chip supplier, [expanded a 20-year partnership into a multi-year agreement: Semtech will invest to reserve dedicated silicon germanium capacity across Tower's fabs in the United States, Israel and Japan](https://www.sec.gov/Archives/edgar/data/928876/000117891326004752/zk2636221.htm) [3]. Semtech's transimpedance amplifiers and laser drivers, the analog front ends that move bits through AI data-center links from 800G through 1.6T toward 3.2T, are built on Tower's SiGe process [3][4]. Cignal AI, an optics research firm, projects datacom optics demand rising from $9 billion in 2024 to an estimated $37 billion in 2026 [5]. Against that, Russell Ellwanger, Tower's chief executive, sold 104,226 shares at $248.34 on August 11, worth $25.9 million and 16.5% of his direct stake; insiders sold $45.6 million of stock over 90 days and $60 million over the past year, with no purchases [1][2].

![Announcement graphic for the Tower Semiconductor and Semtech expanded SiGe partnership](https://storage.googleapis.com/theinference-public/img/b25b41760689d20b.jpg)

*The October 13 announcement: Semtech will invest to reserve dedicated silicon germanium capacity across Tower's fabs in the United States, Israel and Japan. (Tower Semiconductor via LinkedIn)*

## The ramp is already in the revenue line

Second-quarter revenue was $460.08 million, up 23.7% year over year, with EPS of $0.88 against a $0.76 consensus, and [management called the quarter's revenue and margins company records](https://finance.yahoo.com/marks/stocks/articles/tower-semiconductor-tsem-q2-2026-163002468.html) [1][6]. RF infrastructure, the segment carrying the optics work, was 49% of revenue, up more than 140% year over year; silicon photonics ran above a $680 million annualized pace with a $1 billion target for the fourth quarter, underwritten by about $1.3 billion of customer contracts for 2027 and $290 million of prepayments [6]. Third-quarter guidance sits at a $520 million midpoint, an annualized pace above $2 billion [6].

*Chart: **The optics ramp is already in the revenue line, and Q3 guidance steps it up** Line chart of Tower Semiconductor quarterly revenue from Q3 2023 through Q2 2026 in millions of dollars, rising from the mid-$300s to $460 million, with the Q3 2026 guidance midpoint of $520 million marked as an estimate.*

*Quarterly revenue in USD millions from Tower's SEC filings (Q3 2023 to Q2 2026); Q3 2026 is the guidance midpoint stated on the August 4, 2026, earnings call. [6][9]*

## The multiple is what the shorts are shorting

Tower trades at 77.2 times trailing earnings against a five-year median of 24.5, with the price 232% above GuruFocus's $58.87 model value [2]. The sell side leans the other way: a consensus Moderate Buy and $316 target [1], a $332.93 mean target as of September 15, and September initiations from [Barclays](https://theinference.org/markets/companies/barclays) at Overweight and Mizuho at Outperform [7]. An insider's sale is an opinion; a customer's prepayment is an order.

## November 2 settles the bet

Tower [reports third-quarter results and fourth-quarter guidance on Monday, November 2, 2026](https://www.sec.gov/Archives/edgar/data/928876/000117891326004755/zk2636218.htm) [8]. Watch whether the fourth-quarter guide carries the $1 billion photonics run rate into 2027 or hedges it. That number prices either the $316 target or the doubled short book.

## Takeaway

Short interest in Tower Semiconductor rose 68.8% to 4.57 million shares before the stock fell 14.5% to $195.58; with record optical revenue against a 77x multiple, the November 2 third-quarter report and its fourth-quarter guidance settle which side was right.

## Sources

1. [MarketBeat, "Tower Semiconductor Ltd. (NASDAQ:TSEM) Stock Short Interest Rises 68.8%", 16 October 2026](https://www.marketbeat.com/instant-alerts/options-tower-semiconductor-ltd-nasdaq-tsem-stock-short-interest-rises-688-2026-10-16/)
2. [GuruFocus, "A Look at Tower Semiconductor Ltd (TSEM) After 6.8% Decline: GF Value $58.87 vs Price $195.58", 16 October 2026](https://www.gurufocus.com/news/9128445/a-look-at-tower-semiconductor-ltd-tsem-after-68-decline-gf-value-5887-vs-price-19558)
3. [Tower Semiconductor Form 6-K: Semtech SiGe partnership expansion, filed 13 October 2026](https://www.sec.gov/Archives/edgar/data/928876/000117891326004752/zk2636221.htm)
4. [Compound Semiconductor, "Tower Semi and Semtech extend SiGe partnership", 14 October 2026](https://compoundsemiconductor.net/article/125617/Tower_Semi_and_Semtech_extend_SiGe_partnership)
5. [Unite.AI, "Semtech Secures Dedicated SiGe Capacity at Tower for AI Interconnect", 13 October 2026](https://www.unite.ai/semtech-secures-dedicated-sige-capacity-at-tower-for-ai-interconnect/)
6. [The Motley Fool via Yahoo Finance, "Tower Semiconductor (TSEM) Q2 2026 Earnings Call Transcript", call held 4 August 2026](https://finance.yahoo.com/marks/stocks/articles/tower-semiconductor-tsem-q2-2026-163002468.html)
7. [Fintel via MSN, "Mizuho initiates coverage of Tower Semiconductor with outperform rating", 25 September 2026](https://www.msn.com/en-us/news/other/mizuho-initiates-coverage-of-tower-semiconductor-with-outperform-rating/ar-AA2cYxoc)
8. [Tower Semiconductor Form 6-K: Third Quarter 2026 Financial Results and Conference Call announcement, filed 13 October 2026](https://www.sec.gov/Archives/edgar/data/928876/000117891326004755/zk2636218.htm)
9. [SEC EDGAR, Tower Semiconductor Ltd. quarterly filings (CIK 0000928876), retrieved 18 October 2026](https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000928876)


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Short sellers nearly doubled bets against Tower Semiconductor, then the stock fell 14.5%; Nov. 2 settles it — The Inference. Canonical: https://theinference.org/article/short-sellers-nearly-doubled-bets-against-tower-semiconductor-then-the-stock-fell-14-5-nov-2-settles-it