Tower's customers are booking 2029 while its CEO sells $60 million into the rally
Tower Semiconductor's customers are prepaying for capacity through 2029 while its CEO sells $60 million of stock with zero purchases, and analysts are cutting price targets on valuation rather than the business. Both camps have numbers; only Q4 results settle which one was reading the same data better.
Richard Tang · 3 min read
Tower Semiconductor−10.47% — Tower Semiconductor, down 10.47 percent today printed record results on November 2 and the stock still fell 8% that day, part of a 14% weekly slide 234. The Israeli specialty foundry reported $526 million in quarterly revenue with adjusted earnings of $1.15 a share, nine cents above the $1.06 analysts expected, and guided the December quarter to $600 million against a $579.7 million consensus 24.
Revenue is climbing toward a $600 million fourth-quarter guide
- Revenue
- Estimate
Data
| Revenue | |
|---|---|
| Q3 '25 | $395.67M |
| Q4 '25 | $440.21M |
| Q1 '26 | $413.63M |
| Q2 '26 | $460.08M |
| Q3 '26 | $526.16M |
| Q4 guide (estimate) | $600M |
We covered the bookings side of this on November 2, when Tower guided toward a $2.4 billion annualized run rate with customers prepaying through 2029. What is new since: two named customer deals landed on November 3, banks have started cutting price targets on valuation, and the insider pattern is now quantified at $60 million of CEO sales and zero buys.
The bookings story got two new names this week
Innolight, Tower's partner in the November 3 announcement on optical connectivity, put its first near-package optics device into early production on Tower's PH18M process in California, with additional products taped out on Tower's 300mm platform 5. The same day, Semtech−16.10% — Semtech, down 16.10 percent today signed an expanded multi-year agreement under which it funds dedicated silicon-germanium capacity across Tower's fabs in the United States, Israel and Japan, securing supply for its AI data-center interconnect chips through 3.2T speeds 6.
Tower's silicon-photonics line alone is targeted at a $1.1 billion annualized run rate in the fourth quarter, and customers are effectively financing the build: Tower's $191 million of third-quarter capex exceeded its $185 million of operating cash flow 2.
Wall Street is trimming targets, not estimates
The cuts are on valuation, not the business. Wedbush cut its target to $190 from $300 and kept a Neutral rating, while Stifel−1.49% — Stifel, down 1.49 percent today cut to $235 from $270 and cited contracted peer multiples even as it kept a Buy rating and raised estimates 78. Against that, the mean target across analysts sits at $276, and the stock now trades at 26x forward earnings against 84x at its June peak 72.
Price targets came down $35 to $110 this week
- Old target
- New target
Data
| Old target | New target | Change | |
|---|---|---|---|
| Wedbush | 300 | 190 | -36.7% |
| Stifel | 270 | 235 | -13.0% |
The sellers have the best information
CEO Russell Ellwanger, who called this "the strongest growth phase in our history," made 37 open-market sales and zero purchases in six months, about $60 million of stock 21. Meitav Investment House, a long-time Israeli holder, emptied its entire 1.78 million-share stake in its Q2 2026 filing, so it is an older signal than the deal news, but it points the same way 1.
Both camps can be right about different things. The customer commitments are contractual and dated to 2029 26. Ellwanger has the best information on whether demand past 2027 holds, and on my reading his $60 million of sales suggests he is not betting his own money on the far end of the bookings curve 26.
Watch the fourth quarter: Tower has to hit $600 million and start 2027 without the usual first-quarter dip 2. If it does, the sellers were harvesting a peak. If it does not, they were early.
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