The curse of being Israels most valuable company

Earlier this week chipmaker Tower Semiconductor Ltd. (Nasdaq: TSEM; TASE:TSEM) made history by becoming Israel’s most valuable company with a market cap of $37.7 billion. Tower has benefitted from the positive momentum on the chip market due to the huge investment in AI infrastructure.

Tower’s share price has jumped nearly 900% in the past five years and its 10% gain on Monday on Wall Street saw it leapfrog Bank Leumi (TASE: LUMI), Elbit Systems Ltd. (Nasdaq: ESLT; TASE:ESLT), and Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA). Only last week, Tower’s market cap exceeded Bank Hapoalim (TASE: POLI). However, Tower’s time at the summit was short-lived – less than 24 hours after reaching the top, the world’s chip stocks plummeted, and Tower’s share price tumbled 10.79%, to take its market cap back below Leumi, Elbit and Teva.

Does conquering the summit bode well for Tower investors? “Globes” examined what happened to the 10 stocks of Israeli companies that have been at one time or other the most valuable in the last decade. The findings can be defined as the “curse of first place,” since most of them lost tens of percent of their value in the following years, and on average about half of it. Moreover: for most of the Israeli companies that climbed to the top, the fall began after a short period of less than a year after reaching the coveted peak.

“Globes” began its examination with Teva – once nicknamed “the people’s stock,” because every Israeli held it in their investment portfolio. Teva was the most valuable Israeli company for years. Just over a decade ago, Teva traded at a record market cap of over NIS 250 billion (over $60 billion), an amount no other Israeli company has ever even nearly achieved. After nearly collapsing immediately after, following the botched acquisition of pharmaceutical company Actavis (the generics division of Allergan), Teva’s stock is currently enjoying a resurgence. It has soared 250% over the past 3 years, but is still a long way from returning to its heyday.

Teva was succeeded in August 2017 by cybersecurity company Check Point Software Technologies Ltd. (Nasdaq: CHKP), which was then trading with a market cap of $17.7 billion. Check Point’s market cap has disappointed and since fallen, and over time it has earned returns of just 13%.

Rose with the hype and then collapsed

Check Point remained Israel’s most valuable company until 2021 (regaining the title the following year), the year of ‘hype’ on Wall Street during the Covid pandemic. That tech bubble saw a range of Israeli companies achieve dizzying valuations and then collapse. At the start of 2021, solar energy inverter systems company SolarEdge Technologies (Nasdaq: SEDG) saw its market cap reach $17.8 billion, making it Israel’s most valuable company.

But the rapid rise in interest rates around the world made financing costs for the solar energy sector more expensive, and much less profitable. Solaredge’s profit plunged by tens of percent, and so did its stock. Since then, it has lost 84% of its market cap. SolarEdge lasted only a month as Israel’s most valuable company, though it did manage to return to the top in 2023, before the big fall, when it was knocked off the peak by the website building company Wix.com Ltd. (Nasdaq: WIX), which at the time had risen to a market cap of $19.5 billion. Wix has since fallen 88%, amid concerns about the negative effects of AI on its business. After a short time at the top, it was dethroned by oncology treatment company Novocure (Nasdaq: NVCR), which developed a device for treating cancer using electric fields, and which reached a market cap of $23 billion in June 2021. However, it also failed to hold on to the top spot, and following disappointment with its results and the trials it conducted, its stock lost 94% of its value.

Next in line to take the top spot, in September 2021, was dual-traded software company

Nice (Nasdaq: NICE; TASE:NICE), which reached a market cap of $18.6 billion. Nice also failed to hold onto the title for long, and struggled even before the retirement of the veteran CEO Barak Eilam, and the threats of AI to its field of activity. These only exacerbated the declines and the stock has lost 72% of its value since then.

The company that briefly managed occupy top spot was cybersecurity company SentinelOne (NYSE: S), which had a market cap of $18.7 billion in November 2021. However, SentinelOne, which held its IPO in the wave of 2021 has since lost 80% of its value and lost first place at that time to Check Point.

Next in line was auto-tech company Mobileye Global Inc (Nasdaq: MBLY) led by founder Prof. Amnon Shashua. In December 2022, when Intel issued some of the shares of the company it had acquired several years earlier on Wall Street, Mobileye captured the top spot with a market cap of $22 billion. In the first year after the IPO, it even managed to rise by 33% to a record value of $36 billion. Mobileye held the title of Israel’s most valuable company for about two years, but since then 70% of its value has been lost, also due to excess inventory among customers, and it lost the title to Teva, which returned to the top in late 2024.

A surprise at the top came recently from the TASE, when Bank Leumi, with record profits and a tailwind from high interest rates, soared to a value of $19.8 billion and jumped to first place in February 2025. Since then, Leumi has stood out favorably with a positive return of 48%. Last March, defense company Elbit Systems, which has been enjoying more and more huge contracts due to wars around the world, captured top spot with a market cap of $40 billion but has since managed to lose 12% of its value.

The conclusion – stay away from Tower?

Does all of this mean that an Israeli stock that becomes the largest is usually a bad investment? It is possible, but we need to put things in perspective and remember that a company usually becomes the “largest” after its stock has jumped hundreds of percent. That is, after it has made a major improvement in its business, or told a particularly good story so that investors in it until that point time enjoyed an impressive return.

Could it be that this time it is different and Tower will continue to break records? Roy Cohen, VP of Equity Investments at Migdal Mutual Funds, is also optimistic about the future. “Due to its technological capabilities, Tower is one of the main beneficiaries on the local stock exchange from the AI revolution,” Cohen noted. “The world of chips is a major target for capital expenditure (CAPEX) directed by tech giants.

“Tower is a prominent analog chip manufacturer on a global level, due to its leadership in the use of Silicon Photonics technology, which processes data using light (photons) instead of electrical signals (electrons) in the manufacturing process. It has demonstrated advanced capabilities through the use of this technology, which is considered the ‘next thing’ in the field of chip communications.”

Published by Globes, Israel business news – en.globes.co.il – on June 24, 2026.

Source link