Bank of America highlights two stocks amid US market resilience

The latest Bank of America Capital Market Outlook points to two equities—Tower Semiconductor (TSEM) and Csquare (CSQR)—as having upside potential, underscoring the view that the US economy’s resilience continues to defy bearish forecasts [1].

Tower Semiconductor’s earnings beat

Tower Semiconductor reported Q2 2026 revenue of just over $460 million, a 23 % year‑over‑year increase and $5.4 million above analysts’ expectations. Net profit hit a record $91 million, translating to diluted EPS of $0.79—$0.12 higher than the forecast. The stock has rallied 122 % year‑to‑date, yet BofA analyst Oliver Wong maintains a Buy rating with a $367 price target, implying roughly 41 % upside from the current level [1]. Wong cites Tower’s “clear demand visibility” and its planned expansion of silicon‑photonic capacity—targeting more than five‑fold growth by Q4 2026—as structural advantages that could sustain earnings momentum.

Csquare’s IPO and growth outlook

Csquare, a Dallas‑based data‑center operator, priced its IPO at $21 per share, raising $1.05 billion, below the $23‑$27 guidance range. Since debuting on the NYSE in mid‑July, the stock is up about 6 % despite volatility. The company posted Q2 2026 revenue of $280.4 million, up 14.5 % YoY, with colocation revenue climbing 17.5 % year‑over‑year. BofA analyst Michael Funk argues the stock “misprices growth potential,” pointing to a supply‑demand gap in data‑center capacity and Csquare’s ability to address AI‑driven demand quickly. Funk’s thesis suggests a re‑rating as growth accelerates, though no specific price target is disclosed [1].

What to watch

• Upcoming US macro data: non‑farm payrolls (scheduled for the first Friday of the next month) and the Fed’s next policy meeting, which could influence equity valuations and the dollar’s reserve‑currency status.
• Tower Semiconductor’s capacity expansion milestones: the 4Q 2025 silicon‑photonic run‑rate and the 4Q 2026 target of over five‑fold capacity, which will be disclosed in future quarterly reports.
• Csquare’s data‑center utilization rates and any guidance on capital‑expenditure plans, especially as AI‑related demand evolves.

The bank’s focus on these two firms highlights a broader narrative: while bearish voices cite geopolitical tensions and supply‑chain disruptions, the US market’s underlying fundamentals—energy independence, a dominant dollar, and resilient consumer spending—continue to support equity performance. Whether Tower’s expansion and Csquare’s growth can sustain the implied upside remains the key question for investors watching the next earnings cycle.