Wolfspeed Stock Soars 27%: Here’s What Ignited the Rally

Silicon carbide specialist Wolfspeed just jolted the market with a staggering single-day surge—defying the broader tech slump and leaving analysts scrambling.

The Power Play Behind the Spike

No fluke—this rally stems from concrete catalysts. Supply constraints in the wider semiconductor space are driving demand for Wolfspeed’s next-gen materials, while electric vehicle makers are doubling down on efficiency. Enter silicon carbide: faster charging, higher performance, and suddenly, way more valuable.

Street Sentiment Shifts

Institutional money’s piling in—not out of love for innovation, but fear of missing the next hype cycle. Classic Wall Street: late to the party, loud at the bar. Shorts got squeezed, momentum traders piled on, and voilà—a 27% moonshot.

Long Game or Short Spark?

Let’s be real—today’s pop doesn’t guarantee tomorrow’s stability. Wolfspeed’s burning cash to scale capacity, and one earnings miss could vaporize these gains faster than a meme coin dump. But for now? The market’s betting on the future—one wafer at a time.

Wolfspeed will cut its debt by 70%

Last week, a bankruptcy court approved Wolfspeed's re-organization plan that will eliminate $4.6 billion in debt -- a 70% reduction -- while cutting annual interest expenses by 60%. With creditor support secured from more than 97% of senior note holders and two-thirds of convertible holders, the company anticipates emerging from bankruptcy within a matter of weeks.

Wolfspeed formally filed for Chapter 11 protection on June 30 after its mounting debt made it impossible to continue in the normal course of business.

Image source: Getty Images.

Wolfspeed's debt reduction is big, but is it enough?

Wiping out the debt changes the picture for Wolfspeed, but it does not solve the company's underlying issues. Execution has been inconsistent, and the electric vehicle (EV) market, which is central to Wolfspeed's business, is facing its own slowdown.

A cleaner balance sheet gives Wolfspeed a chance to recover, and some investors willing to take on more risk might see potential here. Even so, I am skeptical that the company can secure and hold a meaningful share of the market. Coming out of bankruptcy helps, but it does not mean the turnaround will succeed.