10 Undervalued Quantum Computing Stocks to Buy Now

7. Photronics, Inc. (NASDAQ:PLAB)

Number of Hedge Fund Holders: 23

Forward Price to Earnings (P/E) ratio: 9.34

Photronics, Inc. (NASDAQ:PLAB) provides photomask products used in the manufacturing of semiconductors and flat-panel displays (FPD) worldwide. The company transfers its photomasks circuit designs to semiconductor wafers and display substrates. Photronics doesn’t produce chips, but it helps the quantum computing field with precise photomask solutions for quantum processor production. The company’s business spans across the U.S., Taiwan, China, Korea, and Europe, serving chip designers, foundries, and electronics manufacturers globally.

In Q1 ended February 2, 2025, Photronics, Inc. (NASDAQ:PLAB) made $212 million in revenue, meeting analysts’ expectations. It made $0.52 in diluted earnings per share, beating its guidance, thanks to a solid 25% operating margin. Moreover, the company also made $78 million in operating cash flow—about 37% of revenue—and had $642 million in cash with just $3 million in debt. The revenue for its IC segment dropped 6% from last quarter to $154 million, with mainstream IC demand falling 9% due to industry slowdown. However, the company’s high-end IC products gained ground, making up 39% of total IC sales, which is higher than last year’s 36% share. Additionally, FPD revenue held steady at $58 million compared to both last quarter and last year.

Moreover, Photronics, Inc. (NASDAQ:PLAB) hit a milestone by getting its first orders for G8.6 AMOLED displays, which strengthens its position in cutting-edge display tech. The company’s management keeps pushing to expand its high-end IC mix, especially in the 14-22nm range, to boost selling prices and offset weakness in automotive and industrial markets.

For Q2 2025, Photronics, Inc. (NASDAQ:PLAB) predicts revenue between $208-$216 million, with EPS of $0.44-$0.50 per share and operating margins of 23%-25%. Although the company is cautious about economic and industry instability, its long-term growth should come from AI adoption, quantum processor demand, and its $200 million capital expenditure focused on U.S. expansion and high-value segments. With a forward P/E of 9.34, PLAB is placed in the list of the cheapest stocks to buy now.