Navitas Semiconductor Corporation (NVTS) is facing a fresh challenge at a time when investors were already questioning the company’s long-term growth trajectory. Shares of the power semiconductor specialist came under renewed pressure after rival Wolfspeed (WOLF) filed a patent infringement lawsuit, alleging that several of Navitas’ core gallium nitride (GaN) and silicon carbide (SiC) product families violate multiple Wolfspeed patents. The legal dispute introduces a new layer of uncertainty for a company that has been positioning itself as a key beneficiary of artificial intelligence (AI)-driven power infrastructure demand.
The lawsuit, filed in the U.S. District Court for the District of Delaware, targets some of Navitas’ flagship GaNFast, GaNSlim, GaNSafe, GeneSiC, and SiCPAK products, with Wolfspeed seeking to protect what it describes as its foundational wide-bandgap semiconductor intellectual property. Navitas has rejected the allegations, saying it believes the claims are without merit and intends to defend itself vigorously.
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However, litigation over core technologies could create an overhang for the stock as investors weigh potential legal costs, business disruption, and the broader competitive implications in the fast-growing power semiconductor market.
About Navitas Semiconductor Stock
Navitas Semiconductor is a pure-play power semiconductor company specializing in gallium nitride and silicon carbide technologies for applications spanning AI data centers, electric vehicles, renewable energy, energy storage, consumer electronics, and industrial markets. Founded in 2014, the company develops high-efficiency power chips and integrated power solutions designed to improve energy efficiency and power density. Headquartered in Torrance, California, Navitas has a market cap of $3.1 billion.
Navitas Semiconductor has been one of the strongest-performing names in the power semiconductor space over the longer term, with the stock delivering 120.5% gains over the past year and 98.6% gains year-to-date (YTD) as investors embraced its growing exposure to AI data center power infrastructure, GaN, and SiC technologies. Enthusiasm surrounding the company’s expanding role in next-generation power semiconductors fueled a sharp rally through much of 2026.
However, sentiment has turned sharply negative in recent sessions. NVTS fell about 8.14% on July 7 as part of a broad semiconductor sell-off that swept through AI-related chip stocks. Investors rotated out of high-flying AI names amid concerns that the sector’s rally had become overextended. Additional pressure came from reports that China’s DeepSeek is developing its own AI chip, adding to concerns about intensifying competition in the AI semiconductor market.
To make things worse, the stock slumped further by 4.5% on July 8 as investors reacted to Wolfspeed’s patent infringement lawsuit and reassessed the legal and execution risks facing the company. The lawsuit raised concerns about potential litigation costs, business disruption, and intellectual property risks, prompting investors to lock in profits following the stock’s strong run. As a result, NVTS has lost 14.22% over the past five sessions.
www.barchart.com The stock currently trades at 71.30 times sales (TTM), which is a premium compared to industry peers trading at 3.63 times.
Weak Financial Performance
Navitas Semiconductor reported its first-quarter 2026 financial results on May 5, with results highlighting the company’s ongoing transition.
Revenue declined 38.6% year-over-year (YOY) to $8.6 million from $14 million. Its gross margin deteriorated to -9.3% from 9.1% a year earlier, while non-GAAP gross margin improved to 39% from 38.1%, reflecting a more favorable product mix.
Its non-GAAP operating loss improved slightly to $11.7 million from $11.8 million. On a non-GAAP basis, net loss improved to $9.8 million from $11.2 million in the prior-year quarter, while non-GAAP loss per share improved to $0.04 from $0.06. The company ended the quarter with $221 million in cash and cash equivalents, down from $236.9 million at the end of 2025.
Despite the weaker YOY financial comparisons, Navitas said its high-power business grew approximately 35% YOY and now represents the majority of revenue, driven by AI data centers, grid and energy infrastructure, industrial electrification, and performance computing. Revenue also increased 17.8% sequentially, signaling improving momentum.
Furthermore, management guided for second-quarter 2026 revenue of $10 million, plus or minus $0.5 million, representing more than 16% sequential growth at the midpoint. The company expects non-GAAP gross margin of 39.25%, plus or minus 75 basis points, implying another 25-basis-point sequential improvement, while non-GAAP operating expenses are projected to remain roughly flat in a range of $14.5 million to $15.5 million.
Management reiterated its expectation for continued sequential revenue growth through the remainder of 2026, supported by expanding demand across its high-power markets.
Analysts tracking NVTS project the company’s loss per share to deteriorate 44.4% YOY to $0.39 in fiscal 2026 and another 35.9% to $0.53 in fiscal 2027.
What Do Analysts Expect for Navitas Semiconductor Stock?
Wall Street is cautious about NVTS’ prospects with a consensus “Hold” rating overall. Of the nine analysts covering the stock, one advises a “Strong Buy,” one suggests a “Moderate Buy,” six analysts give it a “Hold” rating, and one offers a “Moderate Sell” rating.
The average analyst price target for NVTS is $13.97, indicating a downside of 1.5%. But, the Street-high target price of $21 suggests that the stock could still rally 48.1%.
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www.barchart.com On the date of publication, Subhasree Kar did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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