Shares of Navitas Semiconductor (NASDAQ: NVTS) climbed approximately 15% on Friday, reaching $18.20, as investors responded positively to the company's first-quarter earnings report, which highlighted a strong shift toward high-power markets such as AI data centers and grid infrastructure. The company's market capitalization now stands at roughly $4.2 billion.
Navitas, known for its gallium nitride (GaN) and silicon carbide (SiC) power semiconductors, reported first-quarter revenue of $8.6 million, an 18% increase from the previous quarter. While this figure was down from $14.0 million in the same period last year, the sequential growth and strategic pivot to higher-margin sectors have reignited investor interest. High-power markets grew about 35% year over year and now represent the 'large majority' of sales.
The company is positioning itself as a key player in the AI infrastructure buildout, focusing on power solutions for data centers that require higher efficiency and smaller form factors. In March, Navitas introduced an 800-volt-to-6-volt power delivery board that eliminates the traditional 48-volt intermediate bus converter, aiming to improve efficiency in AI server racks. President and CEO Chris Allexandre described the quarter as a return to top-line growth, with the company 'meaningfully reaccelerating' its transition away from mobile and low-end consumer segments.
Wall Street has taken notice. Needham raised its price target for Navitas to $21 from $13, maintaining a Buy rating, citing the company's strong results and strategic shift into high-power markets. The firm noted that Navitas' pivot to AI data centers and energy infrastructure is a key driver of future growth.
Despite the optimism, Navitas continues to post losses. The company reported a GAAP operating loss of $27.8 million for the quarter. However, it ended the quarter with $221 million in cash and cash equivalents and no debt, providing a solid financial foundation for its transformation. New Chief Financial Officer Tonya Stevens highlighted that revenue exceeded the high end of guidance and expressed confidence that high-power markets will drive sequential growth through 2026.
Navitas faces significant competition from established players such as Infineon Technologies, Power Integrations, and Texas Instruments, all of which are vying for a share of the 800-volt data center market. Management acknowledged several risks, including customer qualification, converting design wins into revenue, market adoption of 800-volt systems, and competing against rivals with larger R&D and manufacturing budgets.
Allexandre cautioned that it is 'too early to declare victory' on the pivot, but noted that the company is gaining momentum. For investors, the key question remains whether Navitas can convert its samples and power board demonstrations into actual production orders before its stock price outpaces its revenue growth.
