Navitas Semiconductor's Stock Division Under Scrutiny: Potential Split on the Horizon?
Navitas Semiconductor, a small-cap company specializing in gallium nitride (GaN) and silicon carbide (SiC) chips, has seen a significant boost in its share price following a partnership with tech giant Nvidia.
Navitas, trading at around $6 at the time of writing, has been on a rollercoaster ride this year. The company had a slow start to 2025 but its share price skyrocketed after the partnership with Nvidia was announced in May. As a result, Navitas' stock has risen by an impressive 218% as of Sept. 11.
The partnership with Nvidia is expected to be a significant revenue driver for Navitas, as the company is developing technology to support Nvidia's artificial intelligence (AI) data center systems.
Navitas Semiconductor is a high-risk, high-reward company with a $1.2 billion market cap. The company's recent sale of 20 million shares to raise $100 million in capital may have raised concerns among investors, as issuing new shares can dilute the value of each investor's shares. However, for investors looking for semiconductor stocks that are in their early stages and have a high tolerance for risk, Navitas may be worth considering.
A stock split is a method used by companies to either increase or decrease their outstanding shares. Forward splits are most common when a company's share price has been going up and is expensive enough to potentially deter investors. In a forward split, a company effectively divides its shares. For example, a 10-for-1 forward split means each share would be split into 10 new shares. On the other hand, in a reverse stock split, shares are consolidated. For example, a 1-for-10 reverse split means 10 shares would turn into one.
Navitas recently underwent a reverse stock split to meet the Nasdaq stock exchange's minimum share price requirement of $1. The company was previously in danger of being delisted due to a share price below $2, but the partnership with Nvidia raised its price.
The current board of Navitas Semiconductor GmbH includes Chris Allexandre as President and Chief Executive Officer, effective September 1, 2025; he also joined the company's Board of Directors, succeeding founder Gene Sheridan.
Despite the positive developments, it's important to note that Navitas is currently losing money and is expected to continue to do so for a few more years. The company's revenue over the trailing 12 months is $68 million, while earnings before interest, taxes, depreciation, and amortization is a negative $90 million.
Navitas has a wide range of addressable markets, including data centers, electric vehicles, mobile chargers, energy storage, and solar solutions. The company's technology has the potential to revolutionize these industries, making it an exciting investment opportunity for those willing to take on the risk. However, as with any investment, it's crucial to do thorough research and consider seeking advice from a financial advisor.
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