Prediction: 2 Stocks That'll Be Worth More Than Navitas Semiconductor 2 Years From Now

Globe and Mail

4 days ago

Key Points
Navitas' valuations were inflated by its recent AI data center deal with Nvidia.
ChargePoint should command a higher valuation as the EV market heats up again.
Luminar could impress the bulls as its lidars gain acceptance among major automakers.
10 stocks we like better than Navitas Semiconductor ›
Navitas Semiconductor (NASDAQ: NVTS), a producer of gallium nitride (GaN) and silicon carbide (SiC) chips, saw its stock surge to a 52-week high of $9.17 on June 11. That marked a whopping 323% gain over its previous month. That rally was driven by Nvidia 's decision to use Navitas' GaN and SiC chips -- which resist higher voltages, operate at higher temperatures, and switch at higher speeds than traditional silicon chips -- to process its AI workloads at its next-gen data centers. But as that initial euphoria faded, Navitas' stock retreated about 35% to around $6.
Navitas is still a promising growth stock. From 2024 to 2027, analysts expect its revenue to increase at a compound annual growth rate (CAGR) of 17% as its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) turns positive by the final year. That expansion should be fueled by milder headwinds for its core EV, industrial, and solar markets; the growing usage of fast chargers (which use GaN and SiC) chips; and its closely watched deal with Nvidia.
But with a market cap of $1.2 billion, Navitas looks pricey at 19 times this year's sales. If it matches analysts' revenue forecasts through 2027, grows another 17% in 2028, and still trades at the same forward price-to-sales ratio, its market cap could rise 150% to $3 billion over the next two years. But if it's valued at a more reasonable 7 times sales, its market cap would drop to $1.1 billion.
So Navitas' high valuation could limit its upside potential for the foreseeable future. Meanwhile, two less valuable tech stocks -- ChargePoint (NYSE: CHPT) and Luminar (NASDAQ: LAZR) -- might grow faster and eclipse Navitas' market cap over the next two years.
ChargePoint
ChargePoint manages more than 352,000 EV charging ports (over 35,000 of which are DC fast chargers) across the U.S. and Europe. It also provides its customers with access to more than 1.25 million charging ports across the world through its roaming partnerships.
ChargePoint mainly helps businesses set up their own charging stations and set their own rates. Those systems are tethered to its network access, billing, and customer support services. It also provides residential charging systems for homes and apartment complexes.
ChargePoint grew rapidly for years before its revenue abruptly declined 18% in fiscal 2025 (which ended this January). That slowdown was caused by rising interest rates, a chilly EV market, and tougher macro headwinds, which drove many businesses to postpone their installations of new EV charging ports. But as ChargePoint's growth stalled, it cut costs, pruned its workforce, and rolled out new dynamic pricing plans to boost its gross and operating margins.
From fiscal 2025 to fiscal 2028, analysts expect ChargePoint's revenue to grow at a CAGR of 19% as its adjusted EBITDA turns positive by the final year. That growth should be driven by the EV market's recovery, declining interest rates, and other macro tailwinds.
With a market cap of $318 million, ChargePoint's stock looks like a screaming bargain at 0.8 times this year's sales. If it matches analysts' estimates and trades at a more generous 5 times its forward sales by the beginning of fiscal 2028 (which begins in January 2027), its market cap could rise 11-fold to $3.5 billion.
Luminar
Luminar produces lidar (light detection and ranging) systems, which use lasers to detect the distance of surrounding objects and create detailed digital maps. They're often used in driverless vehicles to detect other cars, pedestrians, and road hazards.
The company differentiates itself from its competitors by using an infrared light at the 1,550 nm wavelength, which is higher than the wavelengths used in other lidar systems. Luminar claims that advantage helps its lidars "see" more objects at longer ranges and higher resolutions. It also manufactures most of its own components instead of using off-the-shelf parts.
A growing list of major automakers -- including Volvo and Volkswagen 's Audi -- are using Luminar's lidars. But in 2024, Luminar's revenue only rose 8% as the EV and autonomous vehicle markets cooled and it struggled with Volvo's delayed launch of its EX90 SUV. That slowdown, along with persistent losses, sank Luminar's stock.
From 2024 to 2027, analysts expect Luminar's revenue to grow at a CAGR of 45% as the market warms up again. It's still a highly speculative play, but the math suggests it could be a potential multibagger. With a market cap of $143 million, Luminar trades at just 1.7 times this year's sales.
Assuming it matches analysts' expectations, grows its revenue by another 20% in 2028, and trades at a more generous 10 times its forward sales by the beginning of the final year, its market cap could grow more than 19 times to around $2.7 billion over the next two years. If you're looking for a high-risk, high-reward play, Luminar might check all the right boxes.
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