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Why Navitas Semiconductor Stock Rocketed Higher Today
Key Points
Navitas reported third-quarter 2026 financial results yesterday after the market closed.
Two analysts upgraded Navitas stock today.
Navitas develops next-generation power semiconductors for AI infrastructure and other applications.
Reporting third-quarter 2026 financial results that surpassed analysts' expectations yesterday after the market closed, Navitas Semiconductor (NASDAQ:NVTS) provided investors with plenty to celebrate. Investors, consequently, are expressing their approval by sending shares of the artificial intelligence (AI) infrastructure specialist sharply higher.
As of 2:24 5.m, ET, shares of Navitas are up 6.8%, paring back an earlier 11.7% gain.
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Growing revenue and an expanding gross margin have investors excited
Reporting Q3 2026 revenue of $14 million, Navitas surpassed analysts' expectations that it would post $13.2 million on the top line. Similarly, the company posted an adjusted loss per share of $0.03, better than the $0.04 loss per share that analysts had anticipated.
While the company incurred a net loss, it made progress toward profitability, as evidenced by its gross profit margin. Whereas Navitas reported a gross profit margin of 0.4% in Q2 2026 and 2% in Q3 2025, Navitas generated a 21.5% gross profit margin in Q3 2026.
In addition to addressing the company's most recently completed quarter, it also provided fourth-quarter 2026 guidance: revenue of $15.5 million to $16.5 million. Should it achieve the midpoint of this guidance, it will represent a 119% year-over-year increase.
Impressed by the company's financial results, two firms took more optimistic views of Navitas stock. Rosenblatt upgraded Navitas to buy from neutral, while Craig-Hallum upgraded it to buy from hold. Both firms kept their $13 price targets unchanged.
Navitas designs advanced power semiconductors and power delivery solutions for AI infrastructure, including data centers and grid systems.
Is Navitas stock a buy now?
Although Navitas turned in a solid third quarter, investors should proceed with caution when considering an investment in the AI stock. There's rising pushback from communities regarding the development of data centers -- a possible headwind for Navitas. This, combined with the fact that Navitas remains unprofitable, makes it clear that this AI stock is best suited for those with higher risk tolerances.
Scott Levine has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.