Navitas Semiconductor Corporation (NVTS) has entered the spotlight with a major acquisition. On Monday, Aug. 24, the power chip innovator signed a definitive agreement to acquire Claros, which develops vertical power delivery (VPD) and integrated voltage regulator (IVR) technology for artificial intelligence (AI) data centers.
The acquisition, which values Claros at $232.8 million, strengthens Navitas' position by adding a missing link between power generation and the processor. The company already leads with next-generation GaNFast gallium nitride (GaN) and GeneSiC silicon carbide (SiC) power semiconductors, and Claros would deliver power directly to the chip, completing Navitas' "grid to xPU" portfolio for AI data center infrastructure.
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The combination targets one of AI infrastructure's biggest bottlenecks, which Navitas calls the power wall. Nevertheless, management expects the combined business to more than double its 2030 addressable market to over $8 billion.
Furthermore, the Torrance, California-based firm will pay around $126.4 million in cash at closing and $89.7 million in stock. The remaining consideration stays tied to future performance milestones, so shareholders avoid absorbing all dilution at once. But is the acquisition a strong enough reason to hoard onto Navitas’ shares?
About Navitas Stock
Commanding a market cap of nearly $3.3 billion, Navitas designs and markets power semiconductors. Its portfolio spans gallium nitride and silicon carbide power devices, silicon controllers, and digital isolators, which enable power conversion and charging for various applications.
Demand for the company’s offerings is reflected in its price performance. NVTS stock is up 106.9% in the last 52 weeks. Moreover, the stock has gained 76.5% year-to-date (YTD) and another 15.4% in the last month.
www.barchart.com On the valuation front, NVTS stock is currently trading at 69.54 times sales. The multiple sits above the industry average, leaving investors to pay a rich premium.
A Closer Look at Navitas’ Q2 Earnings
On July 27, Navitas Semiconductor reported Q2 FY2026 revenue of $10.5 million, down 27.3% year-over-year (YOY). The decline reflected its exit from mobile and low-end consumer markets rather than weaker demand across high-power businesses. Revenue increased 22% sequentially, supported by growth across high power applications.
In fact, high power markets grew more than 50% YOY and became the company's primary growth driver. Demand increased across AI data centers, grid infrastructure, and energy systems. Management expects those markets to contribute more than one third of total sales by year-end, giving investors a measure of transition.
Underlying profitability improved modestly. Non-GAAP net loss narrowed to $9.3 million from $9.8 million earlier, representing a 5% YOY improvement. Navitas also reported a non-GAAP loss per share of $0.04, showing the company remains unprofitable while funding its transition toward higher power markets today.
Despite the improving demand profile, shares fell 12.3% in the following session as investors focused on losses and the cost of Navitas' transformation. The AI opportunity looked promising, yet investors wanted stronger evidence that new demand could offset declining legacy revenue and eventually deliver operating leverage.
For Q3, management expects revenue of $13.5 million, plus or minus $0.5 million, implying a return to YOY growth. Non-GAAP gross margin is expected at 39.7%, plus or minus 100 basis points, representing a 20-basis-point sequential improvement at the midpoint.
On the other hand, analysts expect Q3 loss per share to widen 60% YOY to $0.08. Full-year FY2026 loss per share is estimated to widen 14.8% to $0.31. FY2027 estimates call for loss per share to remain unchanged at $0.31, underscoring the distance between Navitas' ambitions and profitability.
What Do Analysts Expect for Navitas Stock?
Wall Street currently assigns NVTS stock an overall "Hold" rating. Among eight analysts covering the stock, one rates Navitas a "Strong Buy," one gives it a "Moderate Buy," five recommend "Hold," and one issues a "Moderate Sell."
The average price target of $14.45 represents potential upside of 13.7%. Meanwhile, the Street-High target of $21 by Needham analyst N. Quinn Bolton points to a gain of 65.2% from current levels.
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www.barchart.com On the date of publication, Aanchal Sugandh 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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