Navitas Semiconductor (NVTS +0.32%) could be about to experience incredible growth in the next five years. The stock has skyrocketed in 2025, rising 165% at the time of writing, as investor enthusiasm builds for its prospects of selling its power control chips to the booming artificial intelligence (AI) data center market. Still, it could be a bumpy ride, as the company is in the process of transforming its product strategy to capitalize on this opportunity, which is expected to take a few years.
Let's examine why investors may or may not be interested in buying the stock at this time.
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Navitas is positioning for long-term growth
The reason to buy the stock is straightforward: There is a massive shortage of power for AI data centers. This is prompting hyperscalers to seek efficient solutions to maximize the value of their infrastructure, and this could ultimately drive more sales of Navitas' power control technologies.
Navitas is shifting its semiconductor business from low-margin markets, such as chip products for consumer devices, to the AI opportunity, where its market-leading gallium nitride (GaN) and silicon carbide (SiC) products are expected to generate high-margin growth. As a result of this strategic move, management anticipates a substantial impact on its revenue and profits over the long term.
NASDAQ: NVTS
Key Data Points
However, this transition won't happen overnight and will cause weakness to its near-term financials. Analysts forecast the company's revenue to decline by 45% in 2025 to $45 million, followed by a further 21% decrease in 2026 to $36 million.
It's short-term pain for long-term gain. The company is not expected to benefit from AI data center demand until 2027. Analysts currently expect the company's revenue to rebound to $66 million in 2027, before increasing by 96% to $130 million in 2028.
So is Navitas a buy?
Navitas is a promising stock to consider for its growth potential in the AI infrastructure boom. Still, it's only suitable for investors who have the patience to hold for several years. The revenue declines expected next year may cause volatility in the share price before things turn for the better.
