Here's Why Shares in Navitas Soared in September

Key Points

• The announcement of a partnership with Nvidia has changed the narrative around the stock.

• Navitas has never made a profit and is unlikely to do so anytime soon, but its growth could be explosive given its role in a new generation of data centers.

• 10 stocks we like better than Navitas Semiconductor ›

Shares in Navitas Semiconductor Corporation (NASDAQ: NVTS) soared by 23.2% in September, according to data provided by S&P Global Market Intelligence. The move marks another leg up for a stock that's now up almost 126% for the year at the time of writing. Here's why.

Image source: Getty Images.

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Navitas' turnaround in 2025

As fellow writer Keith Noonan notes, Navitas' stock has actually declined significantly since its IPO in 2021. Additionally, Navitas is a company that has never generated any operating income in any of its financial years.

Moreover, according to the Wall Street analyst consensus, it's not likely to generate operating income in the near term, either.

Data source: marketscreener.com

However, the clue to why the semiconductor stock performed so well in September and this year overall comes from the dramatic increase in revenue expected in 2027 -- the analyst consensus calls for a nearly 79% year-over-year increase in revenue from 2026.

What will happen in 2027?

The year is set to mark the launch of a new generation of 800V high voltage direct current (HVDC) data centers, driven by Nvidia and a host of partners, including Navitas Semiconductor. In fact, the news of Navitas' involvement sent the stock soaring early in the year.

The new data centers offer significant improvements in efficiency and reduced maintenance costs, helping hyperscalers address the surge in AI-driven demand. Navitas' silicon carbide and gallium nitride semiconductors can facilitate power conversion from the grid to 800V DC in the data center, and then from 800V DC to the lower voltages required to power the IT rack.

Navitas is soaring on data center demand

As such, investors are penciling in long-term revenue and profit growth, as news flow regarding capital spending plans for data centers continues to exceed expectations. For example, the announcement of a deal to invest $300 billion in five new data centers by OpenAI and Oracle, utilizing OpenAI's Stargate AI infrastructure platform.

OpenAI has committed to securing $500 billion in investment as part of Stargate, and the recent announcement brings it to $400 billion.

Consequently, Navitas investors have cause for optimism that the investment isn't in a passing trend, but rather in the early innings of a long investment cycle, which will lead to ballooning revenues and profitability at Navitas. As long as demand for data centers keeps ramping, then sentiment will be positive over the company's growth prospects.

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Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia and Oracle. The Motley Fool has a disclosure policy.