Navitas uses advanced semiconductor materials to make components for power electronics.
Shares have soared as investors have been piling into AI-related stocks.
The company recently appointed a new CEO and unveiled a transformation plan called “Navitas 2.0.”
Shares of Navitas Semiconductor (NASDAQ: NVTS) have soared 284% over the past 12 months, as investors have loaded up on tech stocks that could benefit from the artificial intelligence (AI) boom. In May, the share price rocketed 164% higher in a single day, on news that Navitas is developing cutting-edge semiconductor technology to support Nvidia‘s new high-voltage power system for data centers.
But the chipmaker’s third-quarter results were a reality check. Navitas shares have tumbled 27% since the company reported a steep drop in third-quarter revenue and a widening net loss. With the stock continuing to drift lower as of this writing, is this a golden opportunity to pick up cheaper shares before Navitas gets its mojo back? Or was the dreadful quarter a glaring red flag warning investors to stay away?
Founded in 2014, Navitas describes itself as “the only pure-play, next-generation power-semiconductor company.” Navitas uses advanced semiconductor materials — primarily gallium nitride and silicon carbide — to produce high-performance components for power electronics. Its components are designed to efficiently manage and convert electrical power in a variety of applications, including data centers, solar inverters, electric vehicles, medical equipment, consumer electronics, and mobile charging devices.
After several years of strong top-line growth, Navitas’ revenue has been declining steadily since Q3 2024. In its most recent quarter, the drop-off shifted to a higher gear. Q3 revenue plummeted 53% to $10.1 million, while the company’s net loss widened by 2.7% to $19.2 million.
The good news is that this was the old Navitas Semiconductor. In August, the company appointed semiconductor industry veteran Chris Allexandre as CEO, and Allexandre promptly unveiled a transformation plan called “Navitas 2.0.” As part of Navitas 2.0, the company is pivoting away from its lower-margin consumer and mobile business — particularly in China — and doubling down on high-power, high-growth markets such as AI data centers, performance computing, energy, and industrial electrification.
Since assuming CEO responsibilities in September, Allexandre said that customers in Navitas’ target markets have consistently told him that its gallium nitride and silicon carbide power devices “are the solution to the problem they are trying to solve and the revolution they are driving.” Both gallium nitride and silicon carbide can process power faster, at higher voltages and temperatures, and in smaller form factors than silicon, the most commonly used semiconductor material.
