Could Wolfspeed Make for a Good Contrarian Stock to Buy?

Taking a contrarian position in a stock like Wolfspeed (WOLF -5.71%) carries significant risks, but the potential rewards could be substantial. The semiconductor company, specializing in silicon carbide, has seen its stock plummet 80% this year and recently filed for bankruptcy protection. Yet, there are glimmers of hope: a new executive with turnaround experience has joined, and the company is actively working to restructure its business.

Wolfspeed's financials remain precarious, but if it emerges successfully from bankruptcy, it could tap into growing demand for silicon carbide in electric vehicles and renewable energy. The stock's current valuation reflects extreme pessimism—creating a classic contrarian opportunity for investors willing to bet on a turnaround.