Tower Semiconductor Surges 6.63% on AI-Driven Breakthroughs and Capacity Expansion Momentum

Summary
• Katamaran Capital acquires 74,000 shares of TSEM
• TSEM collaborates with Switch Semiconductor on AI power solutions
• Q3 revenue beats estimates by $1M, driving 18.1% weekly gains
• Options volume spikes in TSEM20251219C110 and TSEM20251219C105 contracts

Tower Semiconductor (TSEM) is trading at a record $104.50, up 6.63% intraday, fueled by a Q3 revenue beat, strategic AI partnerships, and aggressive capacity expansion. The stock has surged 93% year-to-date, outperforming a flat Nasdaq Composite. With AI data center demand accelerating and 300mm wafer bonding tech expanding, TSEM’s rally reflects renewed investor confidence in its specialty chip leadership.

AI Power Solutions and Capacity Expansion Fuel TSEM's Record High
Tower Semiconductor’s 6.63% intraday surge stems from three catalysts: (1) A Q3 revenue beat of $396M, exceeding estimates by $1M, with 7% YoY growth and $93M gross profit; (2) A collaboration with Switch Semiconductor to launch the SW2001, a 12V PoL buck regulator targeting AI servers and telecom infrastructure; and (3) Capacity expansion plans to meet surging demand for its 300mm wafer bonding technology in silicon photonics and 3D-IC integration. These developments position TSEM as a critical supplier for AI data centers, with 14% sequential revenue growth guidance for Q4.

Semiconductor Sector Gains Momentum as TSEM Outperforms
The broader semiconductor sector, led by TSMC’s 2.62% intraday gain, is benefiting from AI-driven demand. However, TSEM’s 6.63% rally outpaces peers like Intel (-0.5%) and AMD (flat), reflecting its niche focus on power management and silicon photonics. SIA data shows global semiconductor sales rose 15.8% QoQ in Q3, with AI and data center infrastructure driving 62% of TSEM’s revenue. TSEM’s 62.46x P/E ratio, while elevated, aligns with its high-growth specialty chip positioning.

Options and ETF Strategies for TSEM's Bullish Momentum
• RSI: 60.28 (neutral to overbought)
• MACD: 5.13 (bullish), Signal Line: 5.70 (bearish), Histogram: -0.57 (divergence)
• 200D MA: $53.05 (far below), 100D MA: $66.56 (below), 30D MA: $86.75 (below)
• Bollinger Bands: $77.73 (lower), $92.37 (middle), $107.01 (upper)
• K-line pattern: Short-term bullish trend, long-term bullish

TSEM’s technicals suggest a continuation of its rally, with key resistance at $107.01 (Bollinger upper) and support at $92.37 (middle band). The stock’s 62.46x P/E and 18.1% weekly gain indicate strong momentum, though the RSI near 60 suggests caution for overbought conditions. While no leveraged ETFs are available, options offer high-leverage exposure.

Top Options Picks:
1. TSEM20251219C110
• Code: TSEM20251219C110
• Type: Call
• Strike: $110
• Expiry: 2025-12-19
• IV: 57.92% (moderate)
• Leverage Ratio: 26.08% (high)
• Delta: 0.3955 (moderate sensitivity)
• Theta: -0.1866 (high time decay)
• Gamma: 0.0249 (high sensitivity to price moves)
• Turnover: 277,840 (liquid)
• Payoff at 5% upside ($109.73): $9.73/share
• This call offers high leverage with moderate delta, ideal for a 5% upside scenario. The high gamma ensures responsiveness to price swings, while the 57.92% IV reflects market volatility.
2. TSEM20251219C105
• Code: TSEM20251219C105
• Type: Call
• Strike: $105
• Expiry: 2025-12-19
• IV: 53.35% (moderate)
• Leverage Ratio: 18.97% (high)
• Delta: 0.5160 (high sensitivity)
• Theta: -0.1993 (high time decay)
• Gamma: 0.0279 (high sensitivity to price moves)
• Turnover: 31,371 (liquid)
• Payoff at 5% upside ($109.73): $4.73/share
• This call provides a balance of delta and leverage, with 53.35% IV and high gamma. It’s well-suited for a continuation of TSEM’s rally, with liquidity ensuring easy entry/exit.

Aggressive bulls should consider TSEM20251219C110 into a break above $107.01 (Bollinger upper band).

Backtest Tower Semiconductor Stock Performance
The back-test based on your “7 % intraday surge” trigger for Tower Semiconductor (TSEM) from 2022-01-01 through today has been completed. Key implementation notes: • Because only daily bars are available, the 7 % “intraday” surge was approximated as a ≥ 7 % jump in the daily close relative to the previous close (a common proxy when true intraday highs/lows are not accessible). • Default risk-management rules were added to make the test tradable: 12 % take-profit, 8 % stop-loss and a 10-day time stop. Feel free to ask for different settings if needed.You can explore the full statistics, trade list and equity curve in the interactive panel below.Let me know if you would like to drill down into any specific trades, tweak the risk controls, or run additional scenarios.

Position for TSEM's AI-Driven Growth with Strategic Options and ETF Exposure
Tower Semiconductor’s rally is underpinned by AI infrastructure demand, capacity expansion, and strategic partnerships. The stock’s 6.63% intraday gain and 93% YTD surge suggest a high-conviction trade, though the 62.46x P/E and RSI near 60 warrant caution. Investors should monitor the $107.01 Bollinger upper band and $92.37 middle band for directional clues. TSMC’s 2.62% gain as a sector leader reinforces the semiconductor sector’s strength. Aggressive bulls may consider TSEM20251219C110 into a break above $107.01, while hedging with TSEM20251219P110 if volatility spikes.