Tower Semiconductor Ltd. (TSEM): Leopold Aschenbrenner Is Bearish on This Company

We just covered the From Fired Researcher to $13.7 Billion King: How Leopold Aschenbrenner Broke the Hedge Fund World and Tower Semiconductor Ltd. (NASDAQ:TSEM) ranks 34th on this list.

Filings for the first quarter of 2026 show that Leopold Aschenbrenner has sold off the stake his hedge fund had in Tower Semiconductor Ltd. (NASDAQ:TSEM). The stock had first appeared in the 13F portfolio of the fund in the third quarter of 2025. Back then, this position comprised 470,000 shares. In the fourth quarter of 2025, the fund had increased this to 723,000 shares, up 53% compared to the previous quarter. The company is an independent semiconductor foundry that provides technology, development, and process platforms for integrated circuits in the United States, Japan, rest of Asia, and Europe.

Tower Semiconductor Ltd. (NASDAQ:TSEM) is often pitched alongside elite AI hardware infrastructure plays, yet the financial profile remains anchored to the lower-margin realities of physical foundries. The firm celebrated a strong year-over-year recovery in Q1 2026, yet gross margin landed at just 26.8%. While this is an improvement for a specialty foundry, it showcases the asset-heavy nature of the business. The company is plagued by high fixed manufacturing overhead, yield dependencies, and raw substrate costs that software or fabless designers never experience. Net margin for Q1 2026 stood at 16%, $65 million net profit on $414 million revenue. A business retaining just $0.16 of every dollar in sales faces severe downside exposure if industry pricing power softens or macro industrial demand cools.

While we acknowledge the potential of TSEM as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock .

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