Shares in Navitas Semiconductor Corporation (NVTS 11.71%) soared by 23.2% in September, according to data provided by S&P Global Market Intelligence. The move marks another leg up for a stock that's now up almost 126% for the year at the time of writing. Here's why.
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Navitas' turnaround in 2025
As fellow writer Keith Noonan notes, Navitas' stock has actually declined significantly since its IPO in 2021. Additionally, Navitas is a company that has never generated any operating income in any of its financial years.
Moreover, according to the Wall Street analyst consensus, it's not likely to generate operating income in the near term, either.
|
Metric |
2024 |
2025Est |
2026Est |
2027Est |
|---|---|---|---|---|
|
Sales |
$83.3 million |
$48.6 million |
$53.1 million |
$95 million |
|
Earnings before interest and taxation |
($49.7) million |
($45) million |
($42.1) million |
($34.1) million |
Data source: marketscreener.com
However, the clue to why the semiconductor stock performed so well in September and this year overall comes from the dramatic increase in revenue expected in 2027 -- the analyst consensus calls for a nearly 79% year-over-year increase in revenue from 2026.
What will happen in 2027?
The year is set to mark the launch of a new generation of 800V high voltage direct current (HVDC) data centers, driven by Nvidia and a host of partners, including Navitas Semiconductor. In fact, the news of Navitas' involvement sent the stock soaring early in the year.
The new data centers offer significant improvements in efficiency and reduced maintenance costs, helping hyperscalers address the surge in AI-driven demand. Navitas' silicon carbide and gallium nitride semiconductors can facilitate power conversion from the grid to 800V DC in the data center, and then from 800V DC to the lower voltages required to power the IT rack.
Navitas is soaring on data center demand
As such, investors are penciling in long-term revenue and profit growth, as news flow regarding capital spending plans for data centers continues to exceed expectations. For example, the announcement of a deal to invest $300 billion in five new data centers by OpenAI and Oracle, utilizing OpenAI's Stargate AI infrastructure platform.
OpenAI has committed to securing $500 billion in investment as part of Stargate, and the recent announcement brings it to $400 billion.
Consequently, Navitas investors have cause for optimism that the investment isn't in a passing trend, but rather in the early innings of a long investment cycle, which will lead to ballooning revenues and profitability at Navitas. As long as demand for data centers keeps ramping, then sentiment will be positive over the company's growth prospects.
