Navitas Semiconductor has made headlines following a remarkable 164% surge in stock value, now priced at $7.16, after announcing a key partnership with NVIDIA, the leading chip maker. Despite this leap, the company’s financials show a complex picture. Over the past year, Navitas generated only $74 million in revenue, with a notable 40% decline in sales in the last quarter, leading to a troubling adjusted operating margin of -84%.
The innovation lies in Navitas’ technology, which utilizes silicon carbide (SiC) and gallium nitride (GaN) as the foundation for its power chips, marking a significant evolution from traditional silicon. This next-generation approach brings numerous advantages. For instance, a GaN-based charger can energize a device three times faster than a typical silicon charger. The collaboration with NVIDIA aims to leverage these chips in the upcoming Rubin Ultra server racks, set to launch in mid-2027.
NVIDIA’s strategy focuses on enhancing power efficiency as AI server demands grow. Traditional silicon chips struggle with high-voltage power conversion, creating inefficiencies and consuming more space. In contrast, Navitas’ advanced chips can handle these higher voltages more efficiently without occupying as much physical space, a crucial factor as data centers expand.
While the long-term outlook for Navitas appears promising, with potential revenue spikes projected for 2026 and 2027 linked to $450 million in design wins, analysts suggest that a short-term downturn may be likely following the stock’s rapid ascent. They forecast a moderate buy rating with a target price of $3.79, indicating a probable 30% decline in the near term.
Overall, the partnership with NVIDIA positions Navitas Semiconductor as a potentially transformative player in the semiconductor industry, with a focus on the future of AI technologies and power efficiency. As the company looks to adapt and innovate, it may emerge stronger in the evolving tech landscape.