Wolfspeed (WOLF 8.74%) stock saw massive sell-offs across the first half of this year's trading. The company's share price fell 94% across the first six months of 2025, according to data from S&P Global Market Intelligence. The valuation collapse occurred despite a 5.5% gain for the S&P 500 index across the stretch.
Wolfspeed stock saw big pullbacks in conjunction with poor quarterly results, a weakening sales outlook, and rising expectations that that the company would file for bankruptcy. The silicon-carbide specialist did submit preliminary filings for Chapter 11 bankruptcy protections at the end of June.
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Wolfspeed stock got crushed in the first half of 2025 as challenges mounted
Wolfspeed's share price saw fluctuations that amounted to relatively little cumulative movement up until March -- when news hit that prompted huge selling action. For starters, the company announced that it was planning on cutting its capital expenditures (capex) for the next fiscal year by between $150 million and $200 million. It also said that it was aiming to cut capex for the fiscal year after that by between $30 million and $50 million. The cost-cutting move suggested that the silicon-carbide specialist was cutting back on growth initiatives and raised red flags among investors.
Later in the month, the stock got hit with an even bigger bearish catalysts. Reports began to circulate that the $750 million in CHIPS Act funding that had been apportioned to the company through the bill would not be distributed due to policy shifts from the Trump administration. Wolfspeed has a large debt load and was looking at the CHIPS Act as a major source of funding, and news that the capital would not be arriving on the expected schedule prompted a big sell-off for its stock.
Wolfspeed stock got hit with another round of big sell-offs in May when the company reported results for the third quarter of its 2025 fiscal year, which ended March 30. While the company reported a loss per share that was lower than Wall Street had anticipated, its sales for the period came in lower than anticipated.
While the sales miss in fiscal Q3 was disappointing, the real kicker was management's revised guidance for the next fiscal year. Wolfspeed said that it now expected sales of roughly $850 million for the period, falling far short of the average Wall Street analyst estimate's call for sales of roughly $959 million in the period. The news added to concerns that Wolfspeed was heading for bankruptcy, and the company finally filed submitted preliminary Chapter 11 filings on June 30.
What's next for Wolfspeed stock?
Wolfspeed stock has actually had a big recovery really early in this year's second half. The surge for the company's valuation kicked off when the silicon carbide specialist announced that it was filing for preliminary Chapter 11 bankruptcy protections at the end of June. The bullish rally picked up even more steam after the company announced that Gregor van Issum would be its next chief financial officer. The stock is now up 260% in the second half of the year, but the gains could be unsustainable.
Due to the company's bankruptcy filings, there's a large probability that the company's stock will be delisted from the New York Stock Exchange in the very near future. Wolfspeed shares will likely continue to trade over the counter, but there's a huge risk that its stock price will plummet upon delisting.
