Navitas Semiconductor (NVTS) saw its shares surge by over 25% on Tuesday, following the company’s announcement regarding its partnership with Nvidia (NVDA). This collaboration designates Navitas as a significant supplier for Nvidia’s forthcoming high-voltage direct current (HVDC) artificial intelligence (AI) factory architecture, marking a pivotal moment for both companies.
The update from Navitas revealed the successful integration of gallium nitride (GaN) and silicon carbide (SiC) power semiconductors into Nvidia’s new 800V AI infrastructure. This accomplishment highlights that Navitas’ chips are operationally supporting Nvidia’s extensive multi-megawatt AI workloads, affirming their performance and scalability. Such advancements not only indicate substantial commercial progress but also have significantly bolstered investor confidence in Navitas as a crucial player in the expanding AI infrastructure sector.
In light of increasing demand for energy-efficient power solutions, Navitas is establishing itself as a vital supplier to Nvidia, which enhances its growth prospects and explains the notable rise in NVTS stock. Since hitting its year-to-date low in early April, Navitas shares have skyrocketed approximately 700%.
Options traders are optimistic about the future trajectory of Navitas shares, with contracts indicating the potential for further gains. Contracts set to expire on October 24 suggest a rise to $15.78, while longer-dated options expiring in January 2026 project a target of $19.31. In the near term, Navitas’ quarterly earnings release on November 3 is anticipated, with analysts predicting a loss of $0.09 per share, representing a 25% decrease compared to the same quarter last year.
Currently, Navitas is trading at a price-sales (P/S) multiple of 21x, which is relatively low for a company in the AI sector when compared to Nvidia’s 34x sales ratio. While Wall Street analysts acknowledge that much of the benefits from the partnership with Nvidia may already be reflected in Navitas’ stock price, the outlook remains positive as these firms continue to innovate and contribute to the AI landscape.