The Motley Fool·2025-07-04 08:29Core Insights - Navitas Semiconductor, a producer of GaN and SiC chips, went public via a SPAC merger on October 21, 2021, with shares initially trading at $13 and peaking at $22.19 on November 12, 2021 [1][2] - The company faced challenges, including missing growth estimates and a decline in stock price to an all-time low of $1.52 on April 4, 2025, due to rising interest rates and macroeconomic headwinds [2][4] - Currently, the stock trades around $6, boosted by a partnership with Nvidia in AI data centers, which has attracted investor interest [4][12] Company Overview - Navitas generates most of its revenue from GaNFast Power integrated circuits, which are more efficient than traditional silicon transistors, used in various applications including mobile fast chargers and EV chargers [4][5] - The company entered the SiC market in 2022 by acquiring GeneSiC, targeting growth in EV and data center markets [6][7] - Major customers include Dell, Changan, and Nvidia, utilizing Navitas' chips in their products [7] Growth and Financial Performance - Navitas initially projected revenue growth from $12 million in 2020 to $308 million by 2024, but actual revenue reached only $83 million in 2024, with adjusted gross margins at 42% [9][10] - Analysts expect a compound annual growth rate (CAGR) of 17% for revenue from 2024 to 2027, with adjusted EBITDA turning positive by 2027 [11] - The anticipated growth is driven by the Nvidia partnership and increased adoption of SiC chips in EV chargers and fast chargers for consumer electronics [12] Market Potential - The global GaN market is projected to grow at a CAGR of 27.4% from 2025 to 2030, while SiC sales are expected to grow at a CAGR of 32.6% from 2024 to 2029 [13] - Despite a current market cap of $1.26 billion and trading at 20 times this year's sales, long-term projections suggest potential growth to a market cap of $7.38 billion by 2035, indicating a decent long-term investment opportunity [14]