Navitas Semiconductor (NVTS 6.73%) shares rose by 14.8% in the week to Friday, 11 a.m. The move comes after the company impressed the market with its fourth-quarter earnings report. The optimism isn't so much about what the company is now, but rather about what it could become in a few years, particularly if its partnership with Nvidia pays off.
Navitas Semiconductor has a bright future
The company is focused on gallium nitride (GaN) and silicon carbide (SiC) power semiconductors. While its roots lie in semiconductors for mobile and consumer products, the company is shifting its focus to higher-growth end markets like AI data centers, grid and energy infrastructure, industrial electrification, and high-performance computing. Management sees the serviceable addressable market (SAM) of these four end markets growing at a compound annual growth rate (CAGR) of 60%-75% from 2025 to 2030.
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Those heady growth rates imply an SAM of up to $5.4 billion in 2030, with AI data centers accounting for $2.5 billion, closely followed by energy and grid infrastructure at $1.8 billion. Demand for the latter is arguably being driven by the former, as hyperscalers continue to struggle to ensure sufficient power to support the growth of AI applications.
Why the stock surged this week
The company's partnership with Nvidia to develop chips suitable for new 800 Volt high voltage direct current (HVDC) data centers set to launch in 2027 is the key game-changing event for the company. It's why investors are willing to grant a market cap of over $2 billion for a company that just reported a non-GAAP operating loss of $46 million for 2025.
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Key Data Points
According to Wall Street analysts, the company won't be profitable by 2027 , but the stock was buoyed by management's guidance for a return to sequential revenue growth in the first quarter of 2026 as it continues to build toward supplying the new AI data centers with power semiconductor solutions in 2027.
