Navitas Semiconductor's (NVTS 6.18%) stock has experienced significant fluctuations over the past year. In April, the chipmaker's stock hit a record low of $1.52 per share. That marked a decline of more than 90% from its record high of $20.16 in November 2021.
Yet Navitas' stock currently trades at around $9. Most of that rally was driven by its new data center deal with Nvidia (NVDA 1.27%) this May, but is its stock still worth buying right now?
Image source: Getty Images.
What sets Navitas apart from other chipmakers?
Navitas develops gallium nitride (GaN) and silicon carbide (SiC) power chips, which both switch faster, consume less power, and are more resistant to higher temperatures and voltages than traditional silicon (Si) chips. Those strengths make them well-suited for electric vehicle (EV) power electronics, fast chargers, solar inverters, data center power supplies, and motor drives.
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Key Data Points
GaN chips run at low-to-mid voltages, while SiC chips operate at mid-to-high voltages. GaN chips are cheaper, faster, and more efficient, making them better suited for smaller devices like phone and laptop chargers. SiC chips are pricier and slower but more robust, which makes them a good fit for high-voltage EV powertrains and industrial systems.
Navitas generates most of its revenue from its GaNFast Power ICs, which bundle together switching, sensing, control, and security features. It increased its exposure to the SiC market by acquiring GeneSiC, a producer of SiC chips for the EV and data center markets, in 2022. Its major customers include Dell, Samsung, and BYD. Nvidia also plans to install Navitas' power chips in its next-gen data centers over the next few years.
According to Global Market Insights, the combined SiC and GaN chip market is expected to expand at a CAGR of 25% from 2024 to 2032. That growth should be driven by the secular expansion of the EV and renewable energy markets, as well as the need for faster switching, denser, and more power-efficient chips in AI data centers and other demanding markets.
Navitas is a fabless chipmaker that outsources its production to third-party foundries. That capital-light business model sets it apart from Wolfspeed (WOLF 1.92%), which manufactures its SiC chips and GaN power devices at its own foundries.
When will Navitas' cyclical slowdown come to an end?
The GaN and SiC markets still have plenty of room to expand, but they're tightly tethered to the cyclical mobile, consumer electronics, EV, solar, and industrial markets. Its revenue surged in 2022 and 2023 as the GaN and SiC markets expanded, but its growth stalled out in 2024 as it ended a partnership with a key distributor.
|
Metric |
2022 |
2023 |
2024 |
9M 2025 |
|---|---|---|---|---|
|
Revenue |
$37.9 million |
$79.5 million |
$83.3 million |
$38.6 million |
|
Revenue Growth (YOY) |
60% |
109% |
5% |
(41%) |
|
Adjusted Gross Margin |
40.8% |
41.8% |
40.4% |
38.4% |
|
Net Income (Loss) |
$75.0 million |
($145.4 million) |
($84.6 million) |
($85.1 million) |
Data source: Navitas Semiconductor. YOY = Year-over-year.
In the first nine months of 2025, its revenue plunged, its adjusted gross margin shrank, and its net losses widened. It faced cyclical headwinds in the mobile and consumer markets as its EV, solar, and industrial customers reduced their orders to right-size their existing inventories.
For the full year, analysts expect Navitas' revenue to decline 45% to $45.5 million as its net loss widens to $106 million. For 2026, they expect its revenue to drop another 21% to $36 million as it narrows its net loss to $74.4 million.
In other words, Navitas hasn't reached the trough of its cyclical downturn yet. Regarding its AI data center deal with Nvidia, Navitas will begin shipping the first power chip samples for this partnership in the fourth quarter of 2025. It expects Nvidia to make its final selections in 2026, followed by the actual mass production of its selected chips in 2027.
Its co-founder and CEO Gene Sheridan also stepped down this August and was succeeded by Chris Allexandre, who previously led Renesas' power management division. That leadership change, made during the depths of a slowdown, was surprising, but Allexandre said the company still had "enormous potential" in its latest conference call.
Specifically, Allexandre said Navitas still had a "tremendous opportunity to win in high power, high growth markets such as AI data centers, performance computing, energy and green infrastructure, and industrial electrification" with its "focus on strong execution."
For 2027, analysts expect Navitas' revenue to rise 84% to $63.3 million as it narrows its net loss to $68.1 million. That acceleration should be driven by its deal with Nvidia and the cyclical expansion of its higher-growth markets.
Is it the right time to buy Navitas' stock?
With a market cap of $2.1 billion, Navitas still looks richly valued at 59 times next year's sales. That high valuation, likely inflated by market buzz regarding its deal with Nvidia, makes Navitas a tough stock to recommend in this frothy and choppy market. Investors should only consider buying this stock at significantly lower valuations after the AI hype subsides.
