Why Is Wolfspeed Stock Surging Today? Unpacking the 2025 Rally
Silicon carbide specialist Wolfspeed just shocked Wall Street—shares are exploding higher as semiconductor demand outstrips every projection.
Breaking Down the Rally
Market momentum isn’t waiting around. Wolfspeed’s tech is sitting at the core of the electric vehicle and AI infrastructure boom, and institutional money is flooding in. Short sellers got trampled. Supply constraints? They’re turning into a premium.
Behind the Numbers
No surprises here—efficiency wins. Wolfspeed’s chips run cooler, handle more power, and charge EVs faster. When legacy automakers and data centers need performance, they’re choosing silicon carbide. Old-school silicon? It’s looking sluggish.
The Big Picture
This isn’t just a spike—it’s a repositioning. As energy standards tighten and compute demands soar, Wolfspeed’s moat deepens. Even the skeptics are quiet. Well, except for the usual finance crowd—always bullish after the 100% climb.
Wolfspeed is slashing its debt
Last week, a bankruptcy court said that it was satisfied with Wolfspeed's plan to eliminate $4.6 billion in debt, paving the way for the embattled chipmaker to exit bankruptcy. The plan will result in a 70% reduction in the company's total debt and a 60% decrease in annual interest expenses. Wolfspeed officially filed for Chapter 11 bankruptcy on June 30 due to mounting debt that made it impossible to operate normally.
With over 97% support from senior note holders and two-thirds of convertible note holders, the company expects to emerge from bankruptcy in just weeks.
Image source: Getty Images.
Fixing the balance sheet is just one step
Reducing its debt by this much is fantastic for Wolfspeed, but the company will continue to face issues in its target market: electric vehicles (EVs). Its chips are well suited for the power requirements of EVs. When EVs were exploding in popularity, that was a great niche to fill. Now, EV sales are slowing.
After three days of euphoria following the approval, it's clear investors are realizing there are still massive hurdles to clear, leading to today's decline.
