Key Points
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The company is pivoting away from lower-margin end markets and toward high-growth high margin markets such as AI data centers and electrification.
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Profitability remains distant, with analysts not expecting profits until at least 2029.
- 10 stocks we like better than Navitas Semiconductor ›
Shares in Navitas Semiconductor (NASDAQ: NVTS) rose by an incredible 151% in the first half of 2026, according to the data from S&P Global Market Intelligence. The performance comes down to a transformative bet that its management took in recent years, and the good news is it’s working.
Navitas pivots toward high-growth markets
The company’s roots lie in lower-margin power chips for mobile and consumer electronics applications. However, its future lies in gallium nitride (GaN) and silicon carbide (SiC) power chips and devices for high-power, higher-margin end markets. These markets include AI data centers, energy infrastructure, high-performance computing, and electrification.
While these end markets appear to be a list of buzzwords that define the investment themes that have worked this year, Navitas isn’t a latecomer to these markets, nor did it fall into them by accident. In contrast, management has deliberately focused on transitioning the business toward these end markets.
Navitas pivots to high-growth end markets
However, as exciting as the pivot is, it hasn’t come without challenges, and the chart below shows what you might call a “valley of death” as its traditional revenue declined, pushing the company from profit to loss.
NVTS Revenue (TTM) data by YCharts
Where next for Navitas Semiconductor
The company undoubtedly has exciting long-term growth prospects, not least due to its partnership with Nvidia and its potential to grow sales through power conversion solutions for a new generation of data centers that Nvidia is developing an architecture for. The new 800-volt high-voltage direct current (HVDC) centers have a radically different structure that leverages the advantages of Navitas solutions.
In addition, Navitas has a major growth opportunity in grid infrastructure. As CEO Chris Allexandre noted at a Morgan Stanley conference earlier in the year, “without a change of the grid infrastructure, you cannot enable the size and the magnitude of the AI data center rollout that we’re going to see in the future.”
That said, Navitas isn’t currently profitable, and according to Wall Street analysts, it won’t be until at least 2029. As such, the stock is often treated as a proxy for how the market is feeling about the momentum behind the AI investment boom on any given day, week, or month.
Still, the stock’s massive outperformance in 2026 is a clear indication that expectations for spending on AI data centers, grid modernization, and electrification have increased significantly throughout the year. That’s a major plus for Navitas, but you will have to be patient before it shows up in its numbers.
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Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.
