Why Navitas Semiconductor Stock Plummeted by 12% Today
Key Points
The company posted a notable year-over-year decline in revenue.
It also badly missed the consensus analyst estimate for net loss.
The stock of next-generation chip company Navitas Semiconductor (NASDAQ: NVTS) was looking like yesterday's news on Tuesday. Many investors gave the company the heave-ho after disseminating its latest set of quarterly results, which were marked by a big miss on the bottom line. The share price eroded by more than 12% that trading session.
A quarter to forget
Navitas published its second-quarter figures after market close on Monday, divulging that it earned revenue of $10.5 million. That was down notably from the $14.5 million in the same quarter of 2025. Net income not under generally accepted accounting principles (non-GAAP, or adjusted) narrowed to $9.3 million ($0.95 per share) from the year-ago deficit of $9.8 million.
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Analysts tracking the chip stock were expecting a significantly better bottom-line result. While Navitas beat their consensus top-line estimate of $9.8 million, the company missed badly on the average adjusted net loss projection of $0.04 per share.
Focusing on its sequential, rather than year-over-year, revenue growth of 22%, Navitas put a positive spin on its performance. It quoted CEO Chris Allexandre as saying that the quarter's results "demonstrate the increasing traction of our strategic shift to Navitas 2.0 and focus exclusively on high-power markets."
That shift is a move away from low-margin consumer products, such as fast smartphone chargers, toward high-power applications for clients, including artificial intelligence (AI) data center operators.
Guiding for growth
Navitas also proffered guidance for its current (third) quarter. It's expecting $13 million to $14 million in revenue, which would be quite an improvement over the $10.1 million in the same period in 2025. Adjusted gross margin is forecast to land just below 40%; the company did not provide net income guidance.
No investor likes a steep revenue decline or a monster bottom-line miss, especially in the same quarter. Hopefully, for Navitas and its investors, it can execute its business pivot well and start delivering meaningful growth again.
Eric Volkman 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.