AI & Quantum's Next Big Winners: 3 Small-Cap Stocks to Watch in 2026

When it comes to artificial intelligence (AI) and quantum computing, large and mega-cap stocks have captured the majority of investor attention. All of the Magnificent Seven companies play some role in AI, from NVIDIA’s (NASDAQ: NVDA) advanced chips to Tesla’s (NASDAQ: TSLA) pursuit of autonomous driving.

Additionally, quantum stocks like IonQ (NYSE: IONQ) have seen their valuations soar. Its market capitalization now sits at over $17 billion. However, there are still companies that play roles in AI or quantum computing that fit into the "small-cap" bucket. "Small-cap" refers to companies with market capitalizations near or below $2 billion.

Three high-risk, high-reward stocks stand out heading into 2026, each with the potential for substantial gains—or sharp declines—over the coming year.

AEHR: Helping Hyperscalers Ensure Chip Reliability

First up is Aehr Test Systems (NASDAQ: AEHR), with a market capitalization of around $770 million. Aehr makes machines that put AI chips under intense conditions, aiming to expose weak points in their manufacturing. This can help hyperscalers ensure that only the most reliable chips enter their data centers. By doing so, they can potentially save money in the long term, as replacing chips after installation can be expensive.

Aehr soared 36% on Aug. 26, as the company announced it had received follow-on orders from a hyperscaler for its Sonoma machines. However, these orders didn’t seem to improve Aehr’s financials much last quarter. Aehr also said in August that a “leading AI processor supplier" is evaluating its FOX-XP wafer-testing machine for potential purchase.

If the company receives more orders next year, the stock has the potential to take off. Still, Aehr does not appear cheap, trading at a forward price-to-earnings (P/E) ratio north of 180x. Its high multiple, combined with the potential to receive orders from the top players in AI, makes Aehr a stock to watch in 2026.

PLAB: Photomask Maker Investing for Long-Term Demand

Photronics (NASDAQ: PLAB) makes photomasks, essential components that act as blueprints in chip manufacturing. Equipment manufactured by ASML (NASDAQ: ASML) utilizes photomasks to project intricate circuit patterns onto silicon wafers. Photronics is not a company that has received much attention from investors throughout 2025. That is, until recently.

On Dec. 10, Photronics shares surged 45%. The company released a strong earnings report, beating on both sales and adjusted earnings per share (EPS). However, the company’s beats were not the main driver of investor optimism. Photronics announced that it was making significant investments in manufacturing facilities. This suggests that the firm has a strong conviction in its ability to grow over the coming years, or it would not commit to these investments.

The company is making these investments due to increasing demand for high-end photomasks, like those used in AI chipmaking. Photronic’s latest earnings mark a significant shift in its outlook, making this $2.2 billion stock one to watch in 2026.

SKYT: Quantum Enabler with Eggs in Many Baskets

Last up is SkyWater Technology (NASDAQ: SKYT), with a market capitalization of around $940 million. SkyWater spiked 27% on Nov. 6, and then another 31% on Nov. 10, after reporting its Q3 2025 earnings. The company significantly beat estimates on both sales and adjusted EPS. This came as the firm recorded record revenue from quantum computing customers. SkyWater serves as a technology and manufacturing partner for companies developing quantum chips.

One key benefit of SkyWater’s business model is that it works with customers, taking various approaches to quantum computing. Because the technology is still far from being economically viable, no one truly knows which method will end up being the most successful. Thus, the company can currently participate in the development of many of these methods, providing revenue today.

Growing its expertise across a variety of quantum modalities can also provide long-term benefits. If one or multiple methods begin to dominate, SkyWater is not boxed in. It can use its accumulated knowledge to serve those customers whose technology is having the most success. SkyWater’s increasing demand from various quantum customers makes it a stock to watch in 2026.

2026 AI and Quantum Watchlist: AEHR, PLAB, and SKYT

AEHR, PLAB, and SKYT are three interesting small-cap stocks to watch in 2026. Their growing prevalence in key technologies like AI and quantum computing provides strong potential. However, investors should exercise significant caution around these names, as small-cap chip stocks also have the potential to see substantial downside volatility.

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