Navitas Semiconductor (NVTS 1.74%), a producer of gallium nitride (GaN) and silicon carbide (SiC) chips, went public by merging with a special purpose acquisition company (SPAC) on Oct. 21, 2021. Shares started trading at $13, and the price rallied to an all-time high of $22.19 on Nov. 12, 2021.
At the time, investors were dazzled by its ambitious long-term forecasts. The buying frenzy in meme stocks in late 2021 amplified those gains and inflated its valuations. But like many other SPAC start-ups, Navitas missed management's own growth estimates. Rising interest rates compressed its valuations, and its stock sank to an all-time low of $1.52 on April 4, 2025.
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But today, the stock trades at about $6 a share. Most of that rally occurred in late May, when a new partnership with Nvidia in artificial intelligence (AI) data centers squeezed out its short-sellers.
That short squeeze, along with other follow-on partnerships, brought back the bulls. So will it eventually deliver millionaire-making gains for its investors?
What does Navitas do?
Navitas generates most of its revenue from its GaNFast Power integrated circuits (ICs). They use GaN power transistors -- which are faster and more power efficient than traditional silicon transistors -- to support switching, sensing, control, and security features on a single chip.
Its transistors are used in mobile fast chargers, EV chargers, laptop adapters, data center power supplies, solar inverters, industrial motor drives, and energy storage. The company says its ICs provide three times the power with 40% energy savings at half the size and weight of traditional silicon power systems, and it has already shipped more than 50 million GaN units.
In 2022, Navitas entered the SiC market by acquiring GeneSiC. These SiC chips are also more resistant to higher temperatures and voltages than silicon chips, so they're often used in many of the same products as GaN chips. Most of that smaller SiC segment's growth is being driven by the EV and data center markets.
With its combined portfolio, Navitas' major customers now include Dell, which uses GaN/SiC chips in its notebook adapters; the Chinese automaker Changan, which uses its GaN ICs in its on-board EV chargers; and Nvidia, which chose Navitas' chips to power the architecture for its AI workloads in its next-gen data centers.
Navitas is a fabless chipmaker, which means it outsources its production to third-party foundries. That capital-light model enables it to focus on developing new chips instead of burning too much cash on the expansion of its own foundries.
How fast is Navitas growing?
Before its public debut, Navitas set some ambitious growth targets. From 2020 to 2024, management believed it could grow its revenue from $12 million to $308 million, expand its adjusted gross margin from 33% to 53%, and for its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to turn positive in 2023. But in reality, its revenue only rose to $83 million in 2024, its adjusted gross margin expanded to 42%, and its adjusted EBITDA stayed in the red.
The company was still growing at an impressive rate, but it disappointed its early investors. That slowdown was caused by macro headwinds for the EV, solar, and industrial markets -- which were expected to drive the expansion of the GaN and SiC markets -- in 2023 and 2024. The company also ended a key distribution deal for its SiC products in late 2024, and selling a higher mix of lower-margin GaN chips (as opposed to its higher-margin SiC chips) reduced its gross margins.
As top-line growth slowed, rising research and development costs further compressed its margins. It reduced its inventories and receivables to clean up its balance sheet during the downturn, but those strategies throttled its near-term revenue growth.
From 2024 to 2027, analysts expect Navitas' revenue to have a compound annual growth rate (CAGR) of 17%, taking it from $83 million to $134 million. They also expect its adjusted EBITDA to turn positive in 2027.
That expansion should be driven by its deal with Nvidia, which will be ramped up in 2026 and be deployed on a broader scale in 2027; as well as the broader use of SiC chips in EV chargers, and the rising adoption of fast chargers for laptops and other consumer electronics.
But is it a millionaire-maker stock?
From 2025 to 2030, the global GaN market could have a CAGR of 27.4%, according to Grand View Research. MarketsandMarkets expects SiC sales to show a CAGR of 32.6% from 2024 to 2029. So even though both markets face near-term headwinds, they should keep expanding as they replace traditional silicon chips.
But with a market cap of $1.26 billion, Navitas' stock isn't cheap at 20 times this year's sales. Assuming its revenue achieves a CAGR of 15% from 2024 to 2035 and still trades at 20 times its forward sales by the final year, its market cap would rise nearly sixfold to $7.38 billion.
That would be a decent long-term gain, but it probably won't make you a millionaire. Navitas is still a good growth stock, but investors should maintain realistic expectations for its future.
