3 AI Semiconductor Stocks That Are Now Trading Below 20X Earnings

AI semiconductor stocks have been holding up, and some have been soaring. Their earnings have risen so much that some are still trading below 20x earnings, like Micron (NASDAQ:MU | MU Price Prediction), Skywater Technology (NASDAQ:SKYT), and Photronics (NASDAQ:PLAB).

What makes them special is that these three are the only U.S.-based semiconductor stocks that have a market cap over $1 billion that are trading this low. Most other semiconductor stocks are trading above 20x earnings and have been treading water as their financials catch up.

The following three have delivered stellar gains in just the past few months. It might be a good idea to snap them up.

Micron (MU)

Micron surged explosively, but things are murkier than they were just a couple of weeks ago. This is because Google recently unveiled a new AI memory compression algorithm called “TurboQuant,” which leads to a 6x memory reduction without accuracy loss and works with existing AI models.

Micron sells memory, and this has led to fears that MU stock could crater as demand cools.

I don’t think so, and nor does the market. Back during the 19th century, the U.K. was supposed to see a significant decrease in coal demand due to more economical fuel. What instead ended up happening was significantly more usage as it became cheaper.

I’m not comparing apples to oranges, since there is a recent precedent for this. When DeepSeek came out in early 2025, it triggered panic since the model was massively cheaper and the performance was the same, or even better than many flagship models at that time.

But instead of reducing AI hardware usage, you’re seeing an even more explosive growth. I expect the same with RAM.

MU stock trades at 19 times earnings and just 7 times forward earnings.

EPS is expected to grow almost 600% for FY 2026, with 190% revenue growth. FY 2027 is expected to see 51.6% revenue growth and 69% EPS growth. With time, I expect these estimates to only increase as demand does.

Skywater Technology (SKYT)

SKYT stock trades at just 12 times earnings, and it has surged due to a growth bump and the fact that it is being acquired by IonQ (NYSE:IONQ) for $35 a share.

The company has its hands on everything semiconductor-related and is involved in technically difficult projects. This likely caught the eye of cash-rich IonQ, which is in the process of absorbing it. SKYT is not a long-term play, but if you buy now, you can still make a slight profit of $7 per share.

The merger is expected to close in Q2 or Q3 2026, with a stockholder vote scheduled for May 8, 2026. Both boards unanimously approved the deal to create what they call a “vertically integrated quantum computing company”.

You will get $15 in cash per share and $20 worth of IonQ per share. If you don’t like quantum stocks, you can just sell IonQ and pocket ~20-25% in gains per share in cash. Again, mergers are not guaranteed, but this one is highly likely.

Photronics (PLAB)

Photronics makes photomasks, the ultra-precise quartz or glass templates that chipmakers and display manufacturers use to transfer microscopic circuit patterns onto semiconductor wafers and flat panel display substrates during production.

The demand is not the only thing that is carrying this stock higher. Photronics has managed to pay off its debt and now has $637 million in cash to invest in its manufacturing. It has also done stock buybacks, and analysts expect growth to rise meaningfully in the coming years.

Growth itself is not in the double digits, and you’re looking at 4-5% annual revenue growth in the coming years, with EPS growth hovering in the high single digits.

This is mainly an export-oriented business that derives just 17.5% of its revenue from inside the U.S. I expect this share to grow as the U.S. expands its own manufacturing. China-related sales will grow too, due to China’s AI hardware sector taking off.

PLAB trades at 19x earnings. Many would still call that expensive, but the real discount is when you look at the enterprise value and the cash flow. The stock trades at less than 10x operating cash flow and at 8x EV-to-EBITDA.