Tower Semiconductor Draws New $109 Million Institutional Stake Amid a 127% Stock Run

Florida-based Hood River Capital Management reported a new position in Tower Semiconductor (NASDAQ:TSEM) valued at approximately $109.22 million, according to a November 14 SEC filing.

What Happened

Hood River Capital Management established a new position in Tower Semiconductor (NASDAQ:TSEM), acquiring 1.51 million shares valued at $109.22 million as of September 30, according to its SEC filing dated November 14. The new stake amounts to 1.29% of the fund’s $8.47 billion in reportable U.S. equity assets, raising its total number of holdings to 152 at quarter-end.

What Else to Know

Top holdings after the filing:

• NASDAQ:APLD: $482.81 million (5.7% of AUM)
• NYSE:MTZ: $350.38 million (4.13% of AUM)
• NASDAQ:KTOS: $246.07 million (2.91% of AUM)
• NASDAQ:DAVE: $215.46 million (2.54% of AUM)
• NYSE:FIX: $199.03 million (2.35% of AUM)

As of Wednesday, shares of Tower Semiconductor were priced at $118.08, up a staggering 127% over the past year and well outperforming the S&P 500's 17% gain in the same period.

Company Overview

Company Snapshot

• Tower Semiconductor offers analog-intensive mixed-signal semiconductor devices, including SiGe, BiCMOS, RF CMOS, CMOS image sensors, integrated power management, and MEMS, as well as wafer fabrication and design enablement services.
• It operates as an independent foundry, generating revenue through manufacturing and customizing semiconductor wafers for integrated device manufacturers and fabless companies on a contract basis.
• The company serves a diversified customer base across consumer electronics, communications, automotive, industrial, aerospace, military, and medical device sectors worldwide.

Tower Semiconductor is a leading pure-play foundry specializing in analog and mixed-signal semiconductor manufacturing, with a global footprint and a workforce of over 5,600 employees. The company leverages advanced process technologies and a flexible manufacturing model to address specialized customer requirements in high-growth, high-reliability end markets. Its competitive edge is built on technology customization, deep industry expertise, and broad market reach across multiple geographies and applications.

Foolish Take

This move shows conviction during a staggering stock run. Tower Semiconductor exited the third quarter with momentum across revenue, margins, and capital deployment. Revenue reached $396 million in the third quarter, up 6% sequentially, while net income climbed to $54 million, or $0.48 per share, reflecting operating leverage across its core platforms. Meanwhile, management’s guidance for a record $440 million of revenue in the fourth quarter underscores why some investors are still leaning in despite the stock’s sharp run-up.

What also stands out is where Tower is spending. The company committed an additional $300 million to expand SiPho and SiGe capacity, targeting optical transceivers and data center demand, segments with structurally higher margins and long-duration growth drivers.

And as for the broader context, this fund’s largest holdings skew toward higher-volatility growth names, suggesting Tower is being used as a quality compounder rather than a speculative swing.

Glossary

13F reportable assets: Assets disclosed by institutional investment managers in quarterly SEC filings, covering U.S. equity holdings.
Assets under management (AUM): The total market value of investments managed by a fund or investment firm.
Top holdings: The largest individual investments in a fund's portfolio, typically ranked by market value or portfolio weight.
Trailing twelve months (TTM): The 12-month period ending with the most recent quarterly report.
Pure-play foundry: A semiconductor company that manufactures chips for other companies but does not design its own products.
Analog-intensive mixed-signal: Semiconductor devices combining analog and digital circuits, often used for processing real-world signals.
SiGe: Silicon-germanium, a semiconductor material used to enhance performance in certain electronic devices.
BiCMOS: A technology combining bipolar and CMOS transistors on a single chip for improved speed and power efficiency.
RF CMOS: Radio frequency complementary metal-oxide-semiconductor; technology for integrating radio frequency circuits on standard CMOS chips.
CMOS image sensors: Devices that convert light into electronic signals, widely used in cameras and imaging equipment.
MEMS: Microelectromechanical systems; tiny mechanical devices built onto semiconductor chips for sensing or actuation.
Fabless companies: Firms that design semiconductor chips but outsource manufacturing to foundries rather than owning fabrication facilities.

Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Comfort Systems USA and Kratos Defense & Security Solutions. The Motley Fool recommends MasTec. The Motley Fool has a disclosure policy.