Where 2025 was a transitional year for Navitas Semiconductor Corporation (NVTS 9.30%), 2026 is when the company will really see the fruits of a strategic pivot into more lucrative applications.
Last year, Navitas moved away from lower-margin lines, specifically in the mobile and consumer business, and shifted into data center infrastructure and industrial electrification. These are higher-margin businesses with significant long-term promise. The data center total addressable market could reach $1 trillion annually by 2030, according to IOT analytics.
NASDAQ: NVTS
Key Data Points
A change in strategy will pay off
The pivot away from those segments was not without near-term headwinds. As Navitas also focused on streamlining its distribution network and reducing inventory to further implement the pivot, this led to a near-term reduction in revenue. As of its third-quarter 2025 earnings, Navitas reported revenue of $10.1 million and expected a further reduction to $7 million in the fourth quarter. Full-year 2025 and Q4 earnings are due to be released on Feb. 24.
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Despite the recent challenges, I'm optimistic that this business transformation will begin to pay off later this year. I predict that Navitas will outperform many of its peers by year's end in both revenue growth and stock appreciation.
As we move deeper into the year, Navitas' semiconductors will be well-positioned to work with artificial intelligence (AI) industry leaders. Navitas has already partnered with Nvidia on a development project, and the company's customers include electric vehicle manufacturers and PC makers such as Dell.
Room to grow if you're an AI optimist
Navitas' stock gained over 200% in the past 12 months, and the company's price-to-sales (P/S) ratio has increased from low single digits to over 35 as of Jan. 29. For these reasons, the stock could be seen as overpriced, but for AI infrastructure bulls, this might be only the beginning.
My prediction is this: Navitas will successfully move beyond its transitional phase early this year and begin accelerating revenue growth, delivering strong returns for investors by the end of 2026.
