Navitas Semiconductor Stock Crashed Last Week: Here’s Why

Another brutal week for chip stocks—Navitas Semiconductor got hammered. No fancy footwork could save it from the sector-wide bloodbath.

The selloff spiral: When semiconductor sentiment sours, even innovators take the hit. Navitas' gallium nitride tech might be cutting-edge, but market panic doesn’t discriminate.

Wall Street’s fickle love affair: Analysts flip from bullish to bearish faster than a crypto trader chasing pumps. One downgrade later, and suddenly everyone ‘saw it coming’.

Closing thought: Maybe they should’ve tokenized their R&D—at least then the losses would’ve been tax-deductible.

Image source: Getty Images.

Navitas stock saw wild swings on China-related news

The TRUMP administration announced on July 28 that it had paused restrictions preventing semiconductors for artificial intelligence (AI) and chip manufacturing equipment from being sold to China. The administration lifted the restrictions in order to increase the chances of getting a trade deal done with China, and it's possible that a trade agreement between the two countries could create some headwinds over the long term for Navitas. The tech specialist produces gallium nitride (GaN) power chips and silicon carbide (SiC) technologies, and a trade deal could reduce competitive barriers and mean that the company winds up facing pressures from Chinese suppliers in its core product categories.

Navitas' trade situation is complicated

While Navitas stock suffered a big pullback early in the week in response to trade news, its share price saw some significant recovery after the company announced it was providing technology for a new device charger from Xiaomi -- one of China's largest tech players. Xiaomi's next-generation 90W GaN charger will make use of Navitas' GaNSense Control integrated circuits.

The Chinese market presents potentially massive opportunities for Navitas, but there's also a risk that competition from other GaN and SiC suppliers in the country will lead to commodification trends that hurt its long-term outlook.