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Yahoo
17 hours ago
- Automotive
- Yahoo
Why Navitas Semiconductor Rocketed 164% in May
Navitas is a small-cap semiconductor stock with declining revenues and operating losses. However, the company was named as a partner for Nvidia's upcoming Kyber data center power infrastructure. Navitas took the opportunity of a higher stock price to raise cash via equity sales, bolstering its balance sheet. 10 stocks we like better than Navitas Semiconductor › Shares of Navitas Semiconductor (NASDAQ: NVTS) rocketed 164.2% in May, according to data from S&P Global Market Intelligence. Entering the month, Navitas has been a small designer of gallium nitride (GaN) and silicon carbide (SiC) chip designs. These niche chips had primarily targeted electric vehicles and electrified infrastructure. But given the recent downturns in these markets, Navitas had seen its revenue go into reverse and its bottom line continuing to lose money. But in mid-May, Nvidia named Navitas as a key partner for Nvidia's upcoming Kyber data center infrastructure, which will be a new architecture to support Rubin-based sever racks beginning in 2027. While other power chip providers were also named, the fact that Navitas was so small, at just $350 million or so market cap at the time of the announcement, caused a massive rally in the stock. Navitas then used the opportunity to sell stock and bolster its balance sheet, extending its runway, likely until the 2027 time frame. As Nvidia explained in a May 20 blog post, the current 54 V DC power distribution systems in today's data centers will push up against their physical limits as AI server racks go to needing 200 kilowatts to power next-generation AI chips. To counter this, Nvidia is developing a ground-up redesign of data centers to an 800 V HVDC power architecture. Nvidia also noted that it was collaborating with a number of power chip and infrastructure companies early on as it develops the new data center power infrastructure, which Nvidia plans to unveil in 2027 for its upcoming Rubin-based systems. The following day, Navitas published its own blog post explaining how the new 800 V architecture will use both Navitas' SiC chips in the power room of data centers, which convert AC grid power to DC power for the data center, and then GaN-based power converters at the server rack level. The day of the blogs, May 21, Navitas rocketed 150% higher, before retreating. But then the following week, Navitas disclosed it had exhausted its $50 million equity at-the-market sales facility, and that it had filed for a new $50 million facility. Normally, when a company notes it has and will dilute shareholders, the stock goes down. But since Navitas' stock had gone up so much, investors viewed the capital raise as a positive, in that it fortified Navitas' balance sheet to bridge more of the time gap between now and 2027. While the prospect of a small company partnering up with Nvidia is highly tantalizing, there weren't any financial terms disclosed in the announcements. That makes sense, as the platform isn't even fully developed yet, and revenues from the venture aren't likely to come before 2027. So it's hard to say right now if Navitas has moved too far, too fast. Still, last month's cash raise will bolster Navitas' balance sheet, giving it more time to build out its platform in anticipation of the 2027 Kyber rollout. Before you buy stock in Navitas Semiconductor, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Navitas Semiconductor wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $668,538!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $869,841!* Now, it's worth noting Stock Advisor's total average return is 789% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 2, 2025 Billy Duberstein and/or his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy. Why Navitas Semiconductor Rocketed 164% in May was originally published by The Motley Fool
Yahoo
27-05-2025
- Business
- Yahoo
Why Navitas Semiconductor Skyrocketed Yet Again Today
Navitas inked a historic deal with Nvidia for its next-generation Rubin-based data center systems. The company makes innovative silicon carbide and gallium nitride chips. Today, Navitas sought to capitalize on its recent stock price increase. 10 stocks we like better than Navitas Semiconductor › Shares of Navitas Semiconductor (NASDAQ: NVTS) skyrocketed as much as 70.7% on Tuesday, before settling down to a 40.9% gain as of 1:22 p.m. ET. The massive gain comes on the heels of last Wednesday's near-200% gain after hours, after the company announced a potentially game-changing deal with Nvidia (NASDAQ: NVDA). Today, Navitas announced it would be following up that bit of good news with an equity sale, which aims to raise $50 million at much higher prices. While an equity raise would normally send a stock down, the stock is actually increasing again today. Coming into last week's announcement, Navitas seemed like a speculative small-cap company. Last quarter's revenue was just $14 million, a decline from the prior-year quarter, with operating losses of $25.3 million. With small volumes of declining revenue, short interest in the company had crept up to 12.8% of shares outstanding and 18.4% of the float as of April 30. However, things may have changed last Wednesday, when Navitas issued a press release announcing its gallium nitride (GaN) and silicon carbide (SiC) chips had been selected to go into Nvidia's upcoming 800V DC architecture, which will be used in Nvidia's upcoming Rubin Ultra-based data center chip systems. GaN and SiC-based chips have been somewhat of a niche product in the chip industry to date, and only cost-effective for the most trying environments where higher voltages under higher temperatures are required, such as electric vehicles and infrastructure. And while EVs have been in a prolonged slump, artificial intelligence (AI) data centers are becoming increasingly power-hungry, to the point where using more SiC and GaN chips may now be required. The announcement likely produced a massive short squeeze last week. However, today, Navitas announced a new at-the-market (ATM) offering, whereby the company can sell shares in the open market to raise cash. In the press release, the company announced it had sold all the prior $50 million ATM authorization, and had signed up for a new ATM program of similar size. Normally, when a company announces it has diluted shareholders and may continue to do so, the stock goes down; however, it appears investors actually cheered this announcement. Likely, the company sold a lot of stock last week after the big surge, so investors may believe it raised that cash at attractive prices. Of note, the company only had $75 million in cash as of the end of last quarter, so raising more cash at attractive prices to extend Navitas' runway was met with applause. Navitas is hard to value right now, as it's unclear as to the impact of the Nvidia contract. While last week's announcement was certainly great news, I'd be wary of chasing any stock merely on the mention of a partnership with or investment from Nvidia. These moves are driven by hype-by-association, with unclear tangible effects. Before you buy stock in Navitas Semiconductor, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Navitas Semiconductor wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $639,271!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $804,688!* Now, it's worth noting Stock Advisor's total average return is 957% — a market-crushing outperformance compared to 167% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 Billy Duberstein and/or his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy. Why Navitas Semiconductor Skyrocketed Yet Again Today was originally published by The Motley Fool
