Tower Semiconductor's stock surged 5.04% during intraday trading on Wednesday, following positive analyst commentary highlighting the company's growth potential in artificial intelligence infrastructure.

Wedbush Securities analyst Matt Bryson suggested in a client note that Tower Semiconductor may be undervalued, citing the company's announced large-scale expansion of its Uozu factory in Japan. The expansion is expected to roughly double the company's silicon photonics capacity to approximately $1 billion per quarter, positioning Tower Semiconductor for significant growth in AI infrastructure markets.

The company has raised its 2028 financial outlook to $3.6 billion in revenue and $1.2 billion in operating profit, up significantly from previous expectations. This strategic expansion upgrades Tower Semiconductor from a traditional analog foundry to a supplier of optical interconnect infrastructure for AI data centers, targeting the growing demand for silicon photonics and advanced packaging in next-generation AI systems.