SkyWater Technology, Inc. (SKYT): A Bull Case Theory

Core Thesis - SkyWater Technology, Inc. (SKYT) is positioned for significant growth, targeting revenue increases from approximately $342 million in 2024 to over $600 million by 2026, with a long-term goal of reaching $1.7 billion by 2035 [2] Company Overview - SkyWater operates as a pure-play technology foundry in the semiconductor sector, providing development, manufacturing, and packaging services in the U.S. [2] - The company is focusing on becoming a foundational partner for next-generation computing, particularly in superconducting integrated circuits and photonics [3] Competitive Advantage - SkyWater's "Technology as a Service" (TaaS) model differentiates it from traditional contract manufacturers, allowing for co-development of chips within its fabrication environment [3] - The company's "Trusted" status with the U.S. Department of Defense creates a strong competitive moat, particularly for government and defense-related programs [4] Financial Performance - Operating leverage is beginning to emerge, with GAAP gross margins reaching 24% in Q3 2025, and margins are expected to expand as the business transitions from R&D-heavy programs to higher-volume wafer services [4] - Strategic investments, such as the acquisition of Fab 25 for approximately $93 million, have significantly increased revenue capacity [5] Market Position and Future Outlook - The company is capital intensive but is well-positioned to benefit from government initiatives like the CHIPS and Science Act, which could lead to a significant valuation rerating [5] - SkyWater's stock price has appreciated by approximately 148.6% since previous bullish coverage, indicating strong market confidence in its long-term revenue scaling and operating leverage [7]