Wolfspeed (WOLF 18.22%) stock is plunging in Thursday's trading. The silicon-carbide (SiC) company's share price was down 15.8% as of 2 p.m. ET. At the same point in the day's trading, the S&P 500 and the Nasdaq Composite were down 0.4% and 0.9%, respectively.
In addition to bearish momentum impacting the broader market, Wolfspeed stock is getting hit with sell-offs connected to its latest quarterly update. While sales and earnings performance actually topped Wall Street's expectations, the company issued disappointing guidance.
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Wolfspeed stock sinks despite quarterly beats
After the market closed yesterday, Wolfspeed published results for the first quarter of its 2026 fiscal year, which ended Sept. 28. The business generated a non-GAAP (adjusted) loss of $0.55 per share on sales of $197 million in the period, beating the average Wall Street analyst estimate's call for a per-share loss of $0.77 on sales of roughly $195.4 million. Revenue was up 1% year over year, and overall margins came in better than anticipated -- but the company's forward guidance disappointed investors.
NYSE: WOLF
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What's next for Wolfspeed?
While Wolfspeed topped sales expectations in fiscal Q1, positive sales momentum appears unlikely to continue in the near term. The company issued guidance for sales to be between $150 million and $190 million in fiscal Q2 -- suggesting a substantial sequential quarterly sales decline at the midpoint of the target range.
Additionally, the business has continued to post a very poor gross margin. The company recorded a gross margin of negative 39% last quarter, and weak sales guidance suggests that the SiC specialist will have trouble benefiting from economies of scale in the near future.
