Is Tower Semiconductor (TSEM) Well-Positioned to Benefit from Growth in Silicon Photonic Content Production?

Investment management company Ave Maria recently released its “Ave Maria Growth Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the third quarter, the fund returned 0.84% compared to the S&P 500 Index’s 8.12% return and the S&P 500® Equal Weight Index’s 4.84% gain. You can check the fund’s top 5 holdings for its best picks for 2025.

In its third-quarter 2025 investor letter, Ave Maria Growth Fund highlighted stocks such as Tower Semiconductor Ltd. (NASDAQ:TSEM). Headquartered in Migdal Haemek, Israel, Tower Semiconductor Ltd. (NASDAQ:TSEM) is an independent semiconductor foundry. The one-month return for Tower Semiconductor Ltd. (NASDAQ:TSEM) was -4.68%, and its shares gained 133.25% over the last 52 weeks. On January 6, 2026, Tower Semiconductor Ltd. (NASDAQ:TSEM) stock closed at $122.28 per share, with a market capitalization of $13.587 billion.

Ave Maria Growth Fund stated the following regarding Tower Semiconductor Ltd. (NASDAQ:TSEM) in its third quarter 2025 investor letter:

“Tower Semiconductor Ltd. (NASDAQ:TSEM) is a semiconductor manufacturer focused on analog and mixed signal chips. The company has one of the largest franchises in the niche area of silicon photonics, which is a technology that uses silicon to modulate light waves for data transfer. Traditional chip-to-chip data transfer occurs over copper wires, but transfer speeds are running up against the physical limitations of copper. The only viable alternative is to transfer data with light, and silicon photonics is proving to be the most performant and economical option. There is going to be rapid growth in silicon photonic content produced over the coming years and Tower Semiconductor is well positioned to benefit from the trend.”

Tower Semiconductor Ltd. (TSEM) Demonstrates Breakthrough in 400G Optical Connectivity for AI

Tower Semiconductor Ltd. (NASDAQ:TSEM) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 38 hedge fund portfolios held Tower Semiconductor Ltd. (NASDAQ:TSEM) at the end of the third quarter, up from 28 in the previous quarter. Tower Semiconductor Ltd. (NASDAQ:TSEM) reported revenue of $396 million in Q3 2025, resulting in net profit of $54 million. While we acknowledge the risk and potential of Tower Semiconductor Ltd. (NASDAQ:TSEM) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Tower Semiconductor Ltd. (NASDAQ:TSEM) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered Tower Semiconductor Ltd. (NASDAQ:TSEM) and shared Renaissance International Small Cap Equity Strategy’s views on the company. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.