Why Navitas Semiconductor Skyrocketed Yet Again Today

Core Viewpoint - Navitas Semiconductor's stock experienced significant volatility, with a notable increase following a partnership announcement with Nvidia, indicating a potential shift in investor sentiment and market perception of the company [1][4]. Group 1: Stock Performance - Navitas shares surged as much as 70.7% before settling at a 40.9% gain on the day following the Nvidia announcement [1]. - The stock had previously seen a near-200% gain after hours, reflecting strong market reaction to the news [1]. Group 2: Financial Moves - Navitas announced an equity sale aiming to raise $50 million at higher prices, which typically would lead to a stock decline, but instead, the stock continued to rise [2][8]. - The company had previously sold all of its $50 million at-the-market (ATM) authorization and initiated a new ATM program of similar size [6]. Group 3: Company Background - Prior to the Nvidia announcement, Navitas was viewed as a speculative small-cap company, with last quarter's revenue at $14 million, a decline from the previous year, and operating losses of $25.3 million [3]. - Short interest in Navitas had risen to 12.8% of shares outstanding and 18.4% of the float as of April 30, indicating bearish sentiment prior to the announcement [3]. Group 4: Product and Market Context - Navitas's gallium nitride (GaN) and silicon carbide (SiC) chips were selected for Nvidia's upcoming 800V DC architecture, which is expected to be used in advanced data center chip systems [4]. - GaN and SiC chips are typically used in high-demand environments, such as electric vehicles and AI data centers, which are increasingly requiring more power [5]. Group 5: Investor Sentiment - The announcement of the equity raise was positively received by investors, likely due to the perception that the company raised cash at attractive prices following the stock surge [8]. - The company had $75 million in cash at the end of the last quarter, and raising additional funds at favorable prices was seen as a positive move to extend its operational runway [9].