Why Navitas Semiconductor Stock Plummeted Last Week

Core Viewpoint - Navitas Semiconductor's stock experienced significant volatility due to developments in the U.S.-China trade relations, with a notable decline followed by recovery after securing a new contract with a major Chinese customer [1][2][4]. Group 1: Stock Performance - Navitas Semiconductor's share price fell by 9.2% during a week marked by trade news, while the S&P 500 and Nasdaq Composite also saw declines of 2.4% and 2.2%, respectively [1]. - The stock experienced a recovery later in the week after the announcement of a new battery contract with a major Chinese customer [2][5]. Group 2: Trade Relations Impact - The Trump administration paused restrictions on semiconductor sales to China, which could potentially facilitate a trade deal but may also introduce long-term competitive pressures for Navitas from Chinese suppliers [4]. - The trade situation is complex, as while the stock initially suffered from trade news, it rebounded after announcing a partnership with Xiaomi for a new device charger [5]. Group 3: Market Opportunities and Risks - The Chinese market presents significant growth opportunities for Navitas, particularly in the gallium nitride (GaN) and silicon carbide (SiC) sectors [6]. - However, there is a risk that increased competition from local suppliers could lead to commodification trends, negatively impacting Navitas's long-term outlook [6].