Is Amkor Stock Undervalued Amid Rising AI Packaging & HPC Demand?

Amkor Technology AMKR sits at the intersection of outsourced semiconductor assembly and test and several fast-moving end markets, including artificial intelligence (AI) and high-performance computing (HPC). AMKR is benefiting from structural AI and HPC demand, which is expected to lift advanced packaging as two CPU programs approach launch and AI PCs ramp earlier in 2026.

AMKR shares have returned 10.6% in the trailing three-month period outperforming the Zacks Electronics – Semiconductors industry’s return of 4.4% and the broader Zacks Computer and Technology sector’s drop of 1.3%. However, Amkor shares have underperformed peers including SkyWater Technology SKYT, FormFactor FORM, and Kulicke & Soffa Industries KLIC over the same time frame. Shares of SkyWater, FormFactor, and Kulicke & Soffa have returned 84.9%, 67%, and 40.6% in the past three months.

AMKR Stock’s Performance

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AMKR Stock is Undervalued

The company is trading cheap as suggested by a Value Score of A. In terms of 12-month forward sales (P/S) basis, Amkor trades at a sizable discount to broader benchmarks. The shares are priced at 1.45X forward 12-month sales versus 7.32X for the industry and 6.03X for the broader sector.

In comparison, Kulicke & Soffa, SkyWater and FormFactor shares are currently trading at forward 12-month P/S of 3.38X, 2.16X, and 7.56X, respectively. This huge spread underscores how differently the market prices business models and growth visibility across the broader semiconductor ecosystem.

Amkor’s significant discount can be an opportunity, but it can also reflect what investors are being asked to underwrite. In Amkor’s case, the market is balancing multi-year demand catalysts against near-term seasonality and depreciation pressure tied to front-loaded equipment purchases. The current Zacks Rank #3 (Hold) fits that “steady but not screaming cheap” setup, where execution matters as much as valuation. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

AMKR's P/S Value

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Amkor’s Earnings Power and Near-Term Outlook

Amkor’s fourth-quarter 2025 results showed solid operating performance. Revenue was $1.89 billion, up 16% year over year. GAAP diluted earnings were 69 cents per share, up 60% year over year. Gross margin expanded 160 basis points (bps) to 16.7%, while operating margin was 9.8%.

The near-term setup is less linear. For the first quarter of 2026, Amkor guided revenue to $1.60–$1.70 billion and earnings to 18 cents – 28 cents per share, with gross margin at 12.5%–13.5%. Management characterized the quarter as the seasonal low point for both revenue and earnings.

Margins also face a depreciation headwind in the first half of 2026 because equipment spending is front-loaded. In addition, an estimated $30 million gross profit benefit from asset sales in the fourth quarter of 2025 will not recur, which can make sequential comparisons look weaker even if underlying flow-through remains consistent.

Amkor Technology, Inc. Price and Consensus

Amkor Technology, Inc. price-consensus-chart | Amkor Technology, Inc. Quote

AMKR’s Capital Spend and Funding Levers

The investment plan is aggressive. Amkor guided 2026 capital expenditures of $2.5 billion to $3 billion, a sharp step-up from $905 million in 2025. Roughly 65%–70% is targeted for facilities, including Phase 1 of the Arizona campus, and 30%–35% for advanced packaging capacity such as High-Density Fan-Out, test, and other expansion priorities.

The company also outlined several funding levers that can help bridge timing. Amkor exited 2025 with $1.99 billion in cash and short-term investments, $1.45 billion of total debt, and a year-end debt-to-adjusted EBITDA ratio of 1.2X. Management expects interest expense to decline in 2026 even if gross debt rises, aided by capitalization of construction interest.

Incentives and customer participation are another part of the toolkit. The Arizona project is supported by potential aggregate incentives upward of $2.85 billion and direct funding awarded up to $407 million, alongside customer prepayments and loading agreements that are in place or under discussion for key capacity programs.

Amkor’s Shareholder Items to Watch in 2026

Amkor’s board approved a quarterly cash dividend of 8.352 cents per share, payable March 31, 2026, to shareholders of record as of March 12, 2026. For income-focused investors, the payout is a concrete return lever to track alongside the heavy investment cycle.

Investors also need to monitor share supply. The Kim family announced a secondary offering of 10 million shares. While it does not change Amkor’s operating outlook by itself, added supply can affect near-term trading dynamics, especially when the stock’s valuation case depends on confidence in second-half ramps and improving fixed-cost absorption.

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This article originally published on Zacks Investment Research (zacks.com).

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