NVTS Stock Plunges 22% Since Q3 Results: Is the Dip Worth Buying?

Core Viewpoint - Navitas Semiconductor's shares have dropped 21.7% following disappointing third-quarter 2025 results and a weak revenue outlook, despite a year-to-date increase of 170.3% [1][4]. Financial Performance - The company reported a non-GAAP loss of 5 cents per share for Q3 2025, which was in line with estimates and an improvement from a loss of 6 cents per share in the same quarter last year [2]. - Revenues fell 53.4% year-over-year to $10.1 million, slightly exceeding the Zacks Consensus Estimate by 0.1% [2]. - For Q4 2025, Navitas expects revenues to decline further to approximately $7 million, influenced by a strategic shift away from lower-margin mobile business in China [2][8]. Strategic Shift - Navitas is transitioning from low-margin mobile products to focus on high-power markets, particularly AI data centers, which is termed "Navitas 2.0" [11]. - The company is reallocating resources towards high-power applications, which are anticipated to offer better long-term growth potential [11][12]. - Inclusion in NVIDIA's 800-volt AI factory ecosystem highlights the relevance of Navitas' gallium nitride (GaN) and silicon carbide (SiC) technologies [7][8]. Market Position and Growth Prospects - Navitas is one of the few companies providing both GaN and SiC solutions across the entire power path, which positions it well for future growth [9]. - The company anticipates gradual growth in 2026, with significant opportunities expected in 2027 as new AI power designs gain traction [10][13]. - Customer interest in GaN and high-voltage SiC products is increasing, driven by the demand for new power architectures in AI data centers [12]. Valuation - Navitas Semiconductor's forward 12-month price-to-sales (P/S) ratio is 52.46X, significantly higher than the industry average of 7.82X, reflecting strong growth expectations [14][18]. - Compared to peers like Lam Research, Marvell Technology, and Ambarella, Navitas trades at a premium P/S multiple, indicating investor enthusiasm for AI-related chip demand [18]. Conclusion - The company is well-positioned to capitalize on the growth of AI data centers, with its GaN and SiC chips suited for efficient power use in new high-voltage systems [19]. - If executed effectively, the strategic shift could lead to improved margins and a clearer path to stable long-term growth [20].