Is Navitas Semiconductor a Buy?

• Navitas uses precocious semiconductor materials to marque components for powerfulness electronics.

• Shares person soared arsenic investors person been piling into AI-related stocks.

• The institution precocious appointed a caller CEO and unveiled a translation program called “Navitas 2.0.”

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Shares of Navitas Semiconductor (NASDAQ: NVTS) person soared 284% implicit the past 12 months, arsenic investors person loaded up connected tech stocks that could payment from the artificial quality (AI) boom. In May, the stock terms rocketed 164% higher successful a azygous day, connected quality that Navitas is processing cutting-edge semiconductor exertion to enactment Nvidia's caller high-voltage powerfulness strategy for information centers.

But the chipmaker's third-quarter results were a world check. Navitas shares person tumbled 27% since the institution reported a steep driblet successful third-quarter gross and a widening nett loss. With the banal continuing to drift little arsenic of this writing, is this a aureate accidental to prime up cheaper shares earlier Navitas gets its mojo back? Or was the dreadful 4th a glaring reddish emblem informing investors to enactment away?

Founded successful 2014, Navitas describes itself arsenic "the lone pure-play, next-generation power-semiconductor company." Navitas uses precocious semiconductor materials -- chiefly gallium nitride and silicon carbide -- to nutrient high-performance components for powerfulness electronics. Its components are designed to efficiently negociate and person electrical powerfulness successful a assortment of applications, including information centers, star inverters, electrical vehicles, aesculapian equipment, user electronics, and mobile charging devices.

After respective years of beardown top-line growth, Navitas' gross has been declining steadily since Q3 2024. In its astir caller quarter, the drop-off shifted to a higher gear. Q3 gross plummeted 53% to $10.1 million, portion the company's nett nonaccomplishment widened by 2.7% to $19.2 million.

The bully quality is that this was the old Navitas Semiconductor. In August, the institution appointed semiconductor manufacture seasoned Chris Allexandre arsenic CEO, and Allexandre promptly unveiled a translation program called "Navitas 2.0." As portion of Navitas 2.0, the institution is pivoting distant from its lower-margin user and mobile concern -- peculiarly successful China -- and doubling down connected high-power, high-growth markets specified arsenic AI information centers, show computing, energy, and concern electrification.

Since assuming CEO responsibilities successful September, Allexandre said that customers successful Navitas' people markets person consistently told him that its gallium nitride and silicon carbide powerfulness devices "are the solution to the occupation they are trying to lick and the gyration they are driving." Both gallium nitride and silicon carbide tin process powerfulness faster, astatine higher voltages and temperatures, and successful smaller signifier factors than silicon, the astir commonly utilized semiconductor material.