SkyWater Technology (SKYT) has drawn fresh attention after reporting fourth quarter and full year 2025 results, with quarterly sales of US$171.04 million and a full year swing to net income of US$118.92 million.

The latest earnings update has come alongside a sharp shift in sentiment, with a 90 day share price return of 63.11% and a 1 year total shareholder return of 245.89%. This suggests momentum has built quickly despite a recent 5.72% 30 day share price pullback and a modest 1 day dip, as investors react to SkyWater Technology's trusted foundry positioning and renewed attention from both bulls and more cautious analysts.

If this earnings report has you looking beyond a single semiconductor name, it could be a good moment to scan 34 AI infrastructure stocks as another way to spot potential beneficiaries of demand for advanced computing capacity.

With the shares up very strongly over the past year, trading at US$29.85 and sitting below a US$35 analyst target, the key question now is whether SkyWater is still mispriced or if the market is already factoring in future growth.

Most Popular Narrative: 14.7% Undervalued

At a last close of $29.85 versus a narrative fair value of $35.00, the widely followed thesis leans on capacity expansion and higher long term margins.

The recent acquisition of Fab 25, backed by a multi-year $1b supply agreement with Infineon, quadruples domestic 200mm foundry capacity and creates a platform to address rising customer demand for secure, U.S.-based chip supply, an opportunity amplified by ongoing government and private sector shifts prioritizing supply chain resilience, which is likely to drive top line revenue growth and increase revenue visibility.

Curious what sits behind that $35 figure? Revenue ramps, margin rebuild, and a future earnings multiple all play a part. See how those pieces fit together.

Result: Fair Value of $35 (UNDERVALUED)

However, you still need to weigh up risks such as higher leverage from the Fab 25 deal and ongoing dependence on sometimes unpredictable government and defense contracts.

Another Way To Look At Value

The narrative fair value of $35.00 paints SkyWater as 14.7% undervalued, but the SWS DCF model tells a very different story, with a future cash flow value of just $2.51. That gap suggests high execution risk, so which signal should be treated as more important?

Next Steps

Mixed signals so far, right? If this has you on the fence, it is worth moving quickly to weigh up the company’s 3 key rewards and 4 important warning signs before you settle on a view.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.