<div id="readability-page-1"><div> <h2>Key Points</h2><ul><li>Tower Semiconductor rose along with AI chip stocks during April. </li><li>Tower is seen as a leader in silicon photonics, which spurred a rally as other AI-related stocks reported earnings. </li><li>The company also announced a customer win to produce chips for the U.S. defense industry. </li><li>10 stocks we like better than Tower Semiconductor ›</li></ul>Shares of Tower Semiconductor (NASDAQ: TSEM) rallied 26% in April, according to data from S&amp;P Global Market Intelligence.Tower Semiconductor is a &#34;lagging edge,&#34; or specialty semiconductor manufacturing company, which means it doesn't produce the most leading-edge chips in the world. However, Tower still differentiates itself through intellectual property in important chip types and materials, such as silicon photonics. &#34;SiPho&#34; is seen as the future of AI networking, and Tower Semi's stock has taken off over the past year as a result. Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an &#34;Indispensable Monopoly&#34; providing the critical technology Nvidia and Intel both need. Continue »In April, Tower climbed another 26%, even with minimal company-specific news. The company noted a new product partnership to produce chips for the U.S. defense industry, which may have further strengthened Tower's bona fides. Additionally, positive earnings reports from leading chipmakers likely lifted sentiment for Tower as well.<h2>April was a tremendous month for chip stocks</h2>Although Tower didnt reportearnings, Taiwan Semiconductor Manufacturing (NYSE: TSM) and several other major chipmakers did. The general outperformance spurred a big rise in stocks across the semiconductor sector, which likely helped Tower's stock, too. In addition, Tower announced it will produce a high-performance radar beamforming chip from private chipmaker Axiro Semiconductor, based on Tower's Silicon Germanium (SiGe) technology. The chips are designed specifically for the U.S. defense industry, and will be produced at Tower's U.S.-based fabrication plants. Of note, Tower has fabs in the U.S., Japan, Israel, and Italy. Tower's stock was also starting from a bit of a low to begin the month, as March's sell-off bottomed around March 30, before the announcement of a ceasefire between Iran and the U.S. on April 8. Additionally, on March 26, rival foundry GlobalFoundries (NASDAQ: GFS) sued Tower for patent infringement involving 11 patents across a range of products. For its part, Tower responded to the report by saying it &#34;firmly rejects the ​allegations made by GlobalFoundries and will vigorously defend its intellectual ​property and technology leadership.&#34; Still, the legal tit-for-tat contributed to a small sell-off at the end of March. Investors don't appear too worried about the lawsuit, however, given Tower's strong recovery during the subsequent month.<img src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-dXJsPWh0dHBzOi8vZy5mb29sY2RuLmNvbS9lZGl0b3JpYWwvaW1hZ2VzLzg2OTMwNC9nZXR0eWltYWdlcy0xOTYwOTg2NDAwLmpwZyZ3PTcwMA?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="700" height="469" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-dXJsPWh0dHBzOi8vZy5mb29sY2RuLmNvbS9lZGl0b3JpYWwvaW1hZ2VzLzg2OTMwNC9nZXR0eWltYWdlcy0xOTYwOTg2NDAwLmpwZyZ3PTcwMA"/>Image source: Getty Images. <h2>Tower's momentum could continue as long as AI does</h2>Tower's stock has soared 486% over the past year, and trades at a lofty 71.3 times this year's earnings estimates. That may be a bit expensive to buy today, but Tower's leadership position in producing silicon photonics should keep its revenue and profit growth momentum going over the medium-term. While the stock isn't high on many investors' lists of top AI stocks, it's well worth including in any &#34;AI basket&#34; investors may be considering today. <h2>Should you buy stock in Tower Semiconductor right now?</h2> Before you buy stock in Tower Semiconductor, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Tower Semiconductor wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $471,827!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,319,291!* Now, it’s worth noting Stock Advisor’s total average return is 986% — a market-crushing outperformance compared to 207% for the S&amp;P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of May 9, 2026. Billy Duberstein and/or his clients have positions in Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends GlobalFoundries and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. </div></div>

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Tower Semiconductor's shares surged 26% in April, driven by a rally in AI chip stocks and positive earnings from major chipmakers. The company, recognized for its leadership in silicon photonics, announced a partnership to produce chips for the U.S. defense industry. Despite a recent patent infringement lawsuit from GlobalFoundries, investor sentiment remains strong. Tower's stock has increased 486% over the past year, although it trades at a high valuation of 71.3 times this year's earnings estimates. Analysts suggest considering other stocks for investment, as Tower was not included in a recent top 10 list.

Why Tower Semiconductor Rallied in April