New York, Feb 5, 2026, 12:56 PM (EST) — Regular session
- Tower Semiconductor shares rose about 6.6% in midday trading; the stock swung sharply early in the session
- A new filing detailed a collaboration with Nvidia on 1.6-terabit-per-second data center optical modules
- Focus now turns to Tower’s Feb. 11 results and first-quarter guidance
Tower Semiconductor Ltd shares rose 6.6% to $129.27 in midday trading on Thursday, after the chipmaker disclosed a collaboration with Nvidia tied to data center networking. The stock traded between $118.73 and $145.51 during the session.
The news matters because AI data centers are now running into a different bottleneck: moving data fast enough between processors, memory and switches. Optical modules are plug-in transceivers that send data over fiber, and “1.6T” is shorthand for 1.6 terabits per second of bandwidth.
For Tower, a contract chipmaker — a foundry that manufactures chips for other companies — silicon photonics has become part of the growth pitch as cloud customers chase higher-speed links. Traders have been quick to reprice anything that looks like a tighter tie to Nvidia’s networking roadmap.
In a U.S. regulatory filing, Tower said it is teaming up with Nvidia to advance AI infrastructure with 1.6T data center optical modules designed for Nvidia networking protocols. Tower said its silicon photonics can enable up to double the data rate compared with prior silicon photonics solutions.
Chief Executive Russell Ellwanger said Tower would keep investing across its silicon-germanium and silicon photonics platforms to support performance and manufacturability. Nvidia networking executive Gilad Shainer said AI’s growth was driving demand for “a new class of high-speed, scalable networking.” The release also said Tower operates fabs in Israel, the United States and Japan, shares a 300mm facility in Italy, and has access to additional 300mm capacity at Intel’s New Mexico factory. (MarketScreener)
The rebound followed a bruising session on Wednesday, when the shares fell 11.1% to $121.28. Even after Thursday’s bounce, the stock sat below Tuesday’s close of $136.40, MarketScreener data showed. (MarketScreener)
Nvidia shares were up about 0.8% in midday trading, and the VanEck Semiconductor ETF also gained roughly 0.8%, giving the group a mild lift.
Tower is due to release fourth-quarter and full-year 2025 results on Feb. 11 and provide first-quarter 2026 guidance on the same call, the company said previously. Investors will want to hear whether silicon photonics demand is showing up in the numbers, or still sitting in the pipeline. (Businessinsider)
But the Nvidia collaboration may take time to translate into revenue. Optical-module programs can take quarters to qualify, and volume ramps can slip if customers redesign systems or shift suppliers.
Next up is Feb. 11. Traders will be listening for guidance, capacity plans and any clearer line of sight on whether 1.6T work turns into repeat production orders.
