Could Wolfspeed Drive Long-Term Returns?

Core Viewpoint - Wolfspeed's stock has experienced significant declines, with an 84.7% drop in 2024 and a further 75.8% decrease from the start of 2025 through May, raising questions about its recovery potential [1][2]. Group 1: Company Performance - The company is recognized as a leader in silicon carbide technology, which is essential for enhancing efficiency in power conversion systems and is applicable in high-voltage power scenarios [4]. - Silicon carbide plays a crucial role in electric vehicles (EVs) by improving inverter efficiency, thereby enhancing the range and performance of EVs, and is also vital for renewable energy products like solar panels and wind turbines [5]. - Wolfspeed's Mohawk Valley facility, the largest 200mm Silicon Carbide fabrication facility, reported $78 million in revenue for Q3 2025, marking a year-over-year increase of nearly 179% [6]. Group 2: Financial Concerns - Despite the potential for growth in silicon carbide applications, the company's financial health is a significant concern, particularly its ability to continue as a going concern due to substantial long-term debt of $6.5 billion as of March 30, 2025 [8]. - Reports indicate that Wolfspeed may be on the verge of bankruptcy, with concerns about its capacity to meet debt obligations [9][10]. - The uncertainty surrounding Wolfspeed's financial situation raises doubts about its future prosperity, suggesting that only high-risk investors should consider investing in the stock at this time [11].