SkyWater Technology, Inc. (SKYT) shares surged 20.87% in pre-market trading on Thursday, continuing their upward trajectory following the company's impressive third-quarter earnings report. The semiconductor manufacturer surprised investors with a significant profit, defying expectations of a loss and prompting analyst upgrades.

SkyWater reported an adjusted net income of $11.5 million for Q3, a stark contrast to the consensus estimate of an $8.36 million loss. The company's adjusted earnings per share came in at $0.24, compared to the expected loss of $0.17 per share. Revenue climbed to $150.74 million, representing a 60.7% increase from the same quarter last year and surpassing the expected $135.50 million. The strong performance was driven by record revenues from quantum computing customers, successful Texas operations, and accelerated program timing in aerospace and defense markets.

Following the earnings release, analysts have become increasingly bullish on SkyWater's prospects. TD Cowen raised its price target to $24 from $22, while Piper Sandler increased its target to $17 from $12. The company's positive outlook, including Q4 consolidated revenue guidance between $155 million and $165 million, and the scheduled completion of Advanced Packaging tool installations in Florida by early 2026, has further fueled investor optimism. As SkyWater continues to demonstrate strong growth and improved profitability, the market appears to be reevaluating the company's potential in the competitive semiconductor industry.