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1. What happened
Tower Semiconductor (TSEM) jumped more than 6% to $230.66 in Friday trading after Mizuho Securities analyst Vijay Rakesh initiated coverage with an outperform rating and a $300 price target. The rally landed on September 25, 2026, as chip stocks bounced back after two straight days of declines: the Philadelphia Semiconductor Index (SOX), made up of the 30 largest chip stocks traded in the US, climbed 1.7% in afternoon trading and earlier reached its highest level in more than a month, according to Investor’s Business Daily.
It wasn’t just Tower. Credo Technology (CRDO), a data-center networking gear maker, surged nearly 8% to $213.20. Qualcomm (QCOM) climbed more than 5% to $204.40 as analysts welcomed the company’s latest mobile chips unveiled this week at its Snapdragon Summit. AMD traded roughly flat at $629.95, still digesting Bank of America’s price-target raise to $720 earlier this week.
2. Why it matters
Mizuho’s thesis is what makes this move interesting. Rakesh called Tower “the leading, fastest-growing foundry for Silicon Photonics (SiPho) chips inside optical connectivity transceivers” — chips that speed up data transmission inside AI data centers. The firm forecasts that market reaching $8.5 billion by 2029 at a four-year compound annual growth rate of 60%.
That framing explains the shape of today’s rally. Optical interconnect is becoming one of the real bottlenecks in AI infrastructure: as clusters scale up, faster and more power-efficient networking matters almost as much as the compute itself. A broad bid across connectivity-exposed names — Tower in foundry, Credo in networking gear — alongside Qualcomm’s Snapdragon momentum suggests money is rotating back into semis tied to both AI infrastructure and the device upgrade cycle after the two-day skid. Tower’s 6% jump on a fresh buy call, rather than a broad index melt-up, reads as stock-picking under a recovering tape rather than pure beta chasing.
3. What to watch
Next up: whether the SOX can hold above its one-month high, follow-through on Qualcomm’s Snapdragon Summit design wins, and whether more sell-side coverage picks up the silicon photonics thread. Foundry order trends and any fresh hyperscaler capex commentary will decide if this is a relief bounce or the start of a new leg for the group.
Related reading
- Bank of America raises AMD price target to $720 on agentic AI, CPU demand
- Microsoft jumps 3.9% to 10-month high on new Copilot AI capabilities
Sources
- Investor’s Business Daily — Chip stocks rise after two-day skid; Tower Semiconductor among leaders
- Investor’s Business Daily — Chip stocks retreat; Qualcomm secures Apple licensing deal
Auto-posted by the Bull Lounge news desk. Not financial advice.
Discussion question: Is Tower Semiconductor’s silicon photonics runway strong enough to justify Mizuho’s $300 price target — or is that 60% projected growth already priced in after today’s 6% jump?
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