Key Points
Nvidia (NASDAQ: NVDA) is enhancing its portfolio by incorporating technology from Navitas Semiconductor (NASDAQ: NVTS), which specializes in Gallium Nitride (GaN) and Silicon Carbide (SiC) components. The partnership was highlighted on May 20, leading to an initial surge in Navitas’ stock price, although it has since stabilized. In Q1, Navitas reported a revenue decline to $14 million from $23.3 million in Q1 2024, with expected modest revenue growth for Q2 between $14 million and $15 million.
Navitas has struggled with profitability since going public, having never approached breakeven, and is currently spending nearly thrice what it earns. The anticipated integration into Nvidia’s new 800-volt architecture may provide essential revenue but could face challenges due to its competition within the supply chain. Investors are advised to approach Navitas cautiously, as growth expectations may already be factored into its stock price.
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