Shares of Navitas Semiconductor (NVTS +8.75%) have more than doubled year to date to $9.45 at the time of writing. They were up 165% for the year as of Thursday's market close. This performance is despite the company reporting a sharp fall in revenue in the recent quarter. However, Navitas' long-term prospects are improving following a recent partnership with Nvidia.
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Why Navitas' best days are ahead
Nvidia recently named Navitas as a power semiconductor partner for building next-generation data centers. The partnership with the leader in artificial intelligence (AI) chips validates Navitas' leadership in specialized products, such as Gallium Nitride (GaN) power integrated circuits, used for power conversion and control.
NASDAQ: NVTS
Key Data Points
While third-quarter revenue fell 53% year over year, this decline is somewhat intended. Navitas is currently transitioning its focus away from selling low-margin products in consumer markets to more profitable opportunities in supplying specialized components for the AI data center market.
Navitas believes it has enormous growth potential ahead, as leading U.S. hyperscalers turn to GaN and high-voltage silicon carbide (SiC) technologies to address the need for more power efficiency. The company is not expected to return to revenue growth until at least 2027, so investors shouldn't expect quick gains. But looking out five years and beyond, this semiconductor stock could offer significant upside as it transitions to selling into the high-growth AI infrastructure market.
