Watching your screen turn red isn't fun. If you’ve been tracking Navitas Semiconductor (NVTS) lately, you've probably noticed a pretty jarring disconnect. One day there’s a massive announcement about joining the Nvidia ecosystem, and the next, the stock is sliding nearly 10% in a single session.
It’s confusing. Honestly, it’s enough to make any retail investor want to pull their hair out.
The reality is that Navitas is currently a "show me" story. The market is weighing two very different versions of this company. On one hand, you have the visionary pioneer of GaN (Gallium Nitride) and SiC (Silicon Carbide) technology. On the other, you have a business that just saw its quarterly revenue crater by over 50%.
Why is NVTS down right now?
The most immediate reason for the recent dip boils down to a massive strategic reset. Management has basically decided to stop chasing "easy" but low-margin money in the China mobile and consumer electronics market. They're calling it "Navitas 2.0."
Basically, they are intentionaly shrinking.
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Think about that for a second. Most companies do everything they can to hide a revenue drop. Navitas is leaning into it. They are deprioritizing the chips that go into your phone chargers or cheap consumer gadgets because those markets are crowded and the profits are thin. Instead, they want to own the power supply in AI data centers.
But transitions are messy. While the long-term goal of hitting higher-power markets like EVs and industrial energy is great, it leaves a gaping hole in the current balance sheet.
The Numbers That Spooked the Street
When the Q3 2025 results hit, they weren't pretty in the traditional sense.
- Revenue: $10.1 million. That is a 53% drop compared to the previous year.
- Guidance: It didn't get better. For the final quarter of 2025, they signaled revenue between $6.75 million and $7.25 million.
- Profitability: Net margins are sitting at a staggering -220%.
When a stock is trading at a high price-to-sales ratio while revenue is actively contracting, the market usually reacts with a "sell first, ask questions later" mentality. Even though management says this is "short-term pain for long-term gain," Wall Street hates uncertainty.
The Insider Selling Problem
You’ve probably seen the headlines about directors dumping shares. It’s never a great look. In late 2025, several insiders, including Director Ranbir Singh and CFO Todd Glickman, sold off chunks of their holdings.
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In the last 90 days alone, insiders have disposed of over 3.4 million shares worth nearly $30 million.
Now, look. Insiders sell for a lot of reasons. Maybe they need to buy a house, or maybe they’re just diversifying. But when a company is in the middle of a "pivotal transition" and the people at the top are trimming their positions by 15% or 30%, it sends a mixed message to the folks holding the bag. It suggests that even the people in the room aren't sure how long this "transition" will actually take.
Institutional Tug-of-War
Interestingly, while some insiders are exiting, the big fish are still nibbling. Vanguard actually grew its position by over 20% recently. It’s a classic battle between the "fast money" traders who are fleeing the revenue decline and the "deep pockets" who are willing to wait until 2027 for the AI data center play to actually show up in the earnings report.
The Nvidia "Hangover"
Earlier this year, NVTS got a massive boost because it was named as a partner for Nvidia’s 800-volt AI factory ecosystem. It was a huge validation. The stock jumped 30% almost overnight.
But what goes up often comes down. Once the hype from the CES 2026 announcements cooled off, investors started looking at the calendar.
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The Nvidia partnership is incredible, but it's not going to fix the 2026 revenue numbers. Analysts are still forecasting a revenue decline for the full year of 2026—somewhere around $36 million compared to the $45 million expected in 2025. The "Nvidia money" is a 2027 story. If you bought the hype at $15 or $17, you're likely feeling the sting of the market realizing that "soon" actually means "eighteen months from now."
Misconceptions About GaN and SiC
A lot of people think that because GaN is "better" than traditional silicon, Navitas should automatically win.
It’s not that simple.
The world isn't quite ready for the massive engineering shifts required to use these high-voltage chips at scale. We are moving from 400-volt to 800-volt architectures in EVs and data centers, but that’s like trying to change the engines on a plane while it’s flying. It takes time. Navitas is betting the house on this transition, but they are competing against giants like ON Semiconductor and Texas Instruments who have much deeper pockets to weather a storm.
How to Handle the Volatility
If you’re holding NVTS or looking to jump in, you have to treat this like a venture capital investment, not a blue-chip stock.
- Check Your Timeline: If you need this money in six months, this is probably too risky. Most analysts don't expect a real revenue rebound until 2027.
- Watch the Cash: They have about $150 million in the bank. That’s their lifeline. If that starts to dwindle faster than expected because of high R&D costs, that's a major red flag.
- Ignore the Daily Noise: NVTS is going to gap up and down based on every "AI" headline. Focus on "design wins." Every time they announce a new partnership with a hyperscaler (like the recent Avnet or Cyient deals), it adds a brick to the wall of their future revenue.
- The "Bottom" Question: Management thinks the sales spiral will bottom out in early 2026. Keep an eye on the Q1 and Q2 reports. If revenue starts to tick up even slightly, the narrative will shift from "dying consumer business" to "growing AI powerhouse" very quickly.
Navitas is basically a startup trapped in a public company's body right now. They've ripped off the Band-Aid by ditching their old revenue sources, and now they're waiting for the new ones to grow. It’s a gut-wrenching process for shareholders, but it’s the only way they survive in a world dominated by AI power demands.