Navitas Semiconductor (NVTS) The Motley Fool·2024-12-23 21:13Stock Performance - Shares of Navitas Semiconductor Corporation surged as much as 24.6% on Monday, settling at a 20.4% gain by 2 p.m. EST [1] - The stock has been down over 50% in 2024 due to a severe downturn in industrial and auto semiconductor markets [4] - Short interest in Navitas was 18.8% at the end of November, potentially contributing to a short squeeze [4] Geopolitical Impact - The Biden administration launched an investigation into Chinese semiconductor companies, focusing on trailing-edge chips based on silicon carbide (SiC) and gallium nitride (GaN) materials [2] - These chips are critical for applications in auto, industrial, medical devices, telecommunications, and defense [2] - Navitas produces SiC and GaN-based chips, which aligns with the focus of the investigation, leading to a positive market reaction [3] Company-Specific Factors - Navitas is a smaller company with higher risks compared to larger players in the semiconductor industry [4] - The company has never been profitable and remains subject to significant swings due to external factors like interest rates and geopolitics [5] - Navitas sells products to Chinese device makers, making it vulnerable to potential retaliation from China against U.S. chip companies [5] Industry Outlook - A potential turnaround in the industrial, auto, and mobile chip sectors could benefit Navitas, but there are less risky investment options available [6]