Tower Semiconductor

As AI data centers get bigger, the wires connecting all those chips become a bottleneck, and the fix is moving data with light instead of electricity. Tower makes those light-based chips, and that business roughly tripled in the most recent quarter. Customers have already locked in 1.3 billion dollars of orders for 2027 and prepaid almost 290 million dollars to reserve capacity.

In the first quarter of 2026 revenue grew about 16 percent to 414 million dollars, but net profit jumped 62 percent to 65 million dollars. As the higher value light-chip business grows, more of every new sales dollar drops to the bottom line. The company also holds around 1 billion dollars of net cash and almost no debt, so it can fund its expansion without borrowing or issuing new shares.

A lot of future growth is already baked into the stock price after it more than doubled. If the company hits any bump while building out new factory capacity, like equipment delays or slower customer sign offs, the stock could drop sharply because investors are paying today for profits expected years from now.

That headline 1.3 billion dollars of future orders depends on a small group of large customers following through on their own AI buildout plans. Tower is also based in Israel, so regional tension can add extra swings to the stock that have nothing to do with how the business is actually doing.