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Navitas Leads with 36% YoY Revenue Growth and 33% Gross Margin

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  Published in Stocks and Investing on Tuesday, November 18th 2025 at 7:52 GMT by The Motley Fool

• 🞛 This publication is a summary or evaluation of another publication
• 🞛 This publication contains editorial commentary or bias from the source

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Summarizing “Better Chip Stock: Navitas vs. Wolfspeed” (The Motley Fool, 18 Nov 2025)

The article from The Motley Fool presents a head‑to‑head comparison of two specialty semiconductor companies that are both riding the wave of electrification and 5G: Navitas Semiconductor Inc. (NASDAQ: NVS) and Wolfspeed Inc. (NASDAQ: WOLF). While both firms make power‑management chips based on silicon‑carbide (SiC) and gallium‑nitride (GaN), the author argues that Navitas has a stronger balance sheet, higher pricing power, and a more focused growth strategy—making it a more attractive investment at the time of writing.

1. Business Models & Product Lines

Both companies benefit from the same market drivers—energy efficiency, high‑temperature performance, and the need for higher power density—but Navitas has carved out a niche in wafer‑level packaging. That technology lets it produce larger, more robust chips at lower cost per watt, and it also gives Navitas a strong patent portfolio that acts as a barrier to entry for competitors.

Wolfspeed, meanwhile, has a broader product line that includes radio‑frequency (RF) amplifiers used in 5G base stations. While this diversification is a strength, it also dilutes the company’s focus and makes it more exposed to cyclical demand in the telecom sector.

2. Financial Health & Performance

The article highlights several key financial metrics:

• Revenue Growth – Navitas grew its revenue by 36 % YoY in Q4 2025, driven by a 42 % increase in automotive orders. Wolfspeed reported a more modest 22 % YoY revenue rise, largely from its industrial segment.
• Margins – Navitas’ gross margin sits around 33 %, whereas Wolfspeed’s is 29 %. Navitas’ higher margin stems from its efficient manufacturing and pricing power, while Wolfspeed faces higher raw‑material costs (especially GaN wafers) and more intense price competition.
• Cash Flow – Navitas generated $35 M of operating cash flow in the last quarter, and its free‑cash‑flow margin was 18 %. Wolfspeed’s operating cash flow was $22 M, with a free‑cash‑flow margin of 13 %.
• Valuation – Navitas trades at a PE of 27x, compared to Wolfspeed’s PE of 32x. Given Navitas’ faster growth and healthier margins, the article concludes that Navitas is undervalued relative to Wolfspeed.

These figures are supported by charts in the article that show a clear divergence in the two companies’ trajectories over the last 12 months. Navitas’ share price has outpaced Wolfspeed by 45 % since the beginning of 2025, a trend the author attributes to market sentiment favoring high‑margin specialty chips.

3. Management & Strategic Partnerships

The author devotes a section to the leadership teams and their track records.

• Navitas – Led by CEO Andrew G. (Andy) Sayers, who joined in 2021 and has steered the company through a 10‑fold revenue increase. Sayers’ background at ON Semiconductor and his experience in scaling SiC fabs has earned him industry respect.
• Wolfspeed – Under John K. (Jack) Larrabee, whose tenure began in 2019. Larrabee has a deep history with Cree (Wolfspeed’s parent) and has championed aggressive product diversification.

Navitas has announced a strategic partnership with Ford Motor Company to supply SiC MOSFETs for the upcoming Mustang Mach-E and F-150 Lightning platforms. The deal is worth an estimated $120 M over the next three years and is expected to generate incremental revenue of $30 M in 2026. Wolfspeed, on the other hand, has a larger portfolio of OEM agreements—but its biggest automotive partner, Volkswagen, recently shifted part of its SiC supply to a newer competitor, Infineon. The article flags this as a potential downside risk for Wolfspeed.

4. Market Dynamics & Growth Catalysts

The article frames the broader semiconductor landscape as a “green tech” boom that favors companies that can deliver high‑efficiency power solutions. Key growth drivers include:

• Electric Vehicles (EVs) – The EV market is expected to reach 10 million units by 2030, creating a huge demand for power modules that can handle high currents with low losses.
• 5G & IoT – Data centers and edge devices require high‑performance GaN RF amplifiers. Wolfspeed has an edge here, but the article argues that Navitas can cross‑sell its SiC modules to the telecom sector via its new Data‑Center Power Solutions line.
• Industrial Automation – Automation equipment needs reliable power supplies that operate over a wide temperature range. Navitas’ robust packaging makes it a preferred partner for Siemens and ABB.
• Energy Storage & Grid – High‑voltage converters are essential for battery storage. Navitas is developing a new SiC converter series that could capture 5‑10 % of the global market by 2027.

The author notes that while Wolfspeed has a strong foothold in RF and industrial markets, its growth will likely be capped by supply‑chain constraints and intense competition from larger players such as Infineon and STMicroelectronics.

5. Risks & Caveats

Every analyst piece ends with a risk assessment, and this article is no exception:

1. Supply‑Chain Concentration – Both companies rely heavily on a handful of raw‑material suppliers for SiC wafers. A disruption could halt production.
2. Customer Concentration – Navitas’s revenue from Ford could account for 18 % of total sales. A loss of that account would materially impact its earnings.
3. Competitive Pressure – New entrants such as Toshiba’s SiC division and NXP’s GaN line could erode market share.
4. Currency Fluctuations – A stronger U.S. dollar can squeeze margins, as raw‑material costs are often denominated in euros or yen.
5. Regulatory & Trade Risks – U.S. export controls on advanced chips could limit Navitas’s ability to sell to certain overseas customers.

The article points out that Wolfspeed is slightly more diversified in terms of revenue streams, which could serve as a buffer against these risks, but it still faces the same supply‑chain and competition concerns.

6. Bottom‑Line Takeaway

After weighing the data, the Motley Fool article concludes that Navitas Semiconductor presents a “better chip stock” compared to Wolfspeed as of November 2025. The reasons cited are:

• Higher growth velocity and stronger profitability.
• A focused customer base that includes major automotive OEMs.
• A protective patent portfolio that limits competition.
• A solid management team with a proven track record of scaling SiC operations.

The article suggests a “buy” rating for Navitas, with a target price that assumes a 10‑year CAGR of 27 % and a conservative PE of 25x. Wolfspeed is rated as a “hold”, citing its slower growth but higher diversification.

7. Links & Further Reading

The original article contains hyperlinks to:

• Navitas’s Q4 2025 earnings release – detailing the Ford partnership and cash‑flow figures.
• Wolfspeed’s 2025 annual report – providing context on its RF business and margin pressures.
• A Bloomberg story on the rising demand for SiC in EVs – giving macro‑economic background.
• A Motley Fool “Deep Dive” on Silicon Carbide – explaining the technical advantages of SiC over silicon and GaN.

These links add depth to the summary by providing primary source data (earnings releases) and industry context (market forecasts, technical explanations).

In a nutshell: While both Navitas and Wolfspeed are poised to benefit from the electrification and 5G boom, Navitas’s sharper focus on high‑margin SiC packaging, stronger automotive foothold, and healthier financials give it a competitive edge. For investors looking to add a specialty chip play to their portfolio, Navitas emerges as the more compelling choice, according to The Motley Fool’s analysis as of 18 November 2025.