NVTS Stock Rises 90% in 3 Months: Time to Hold or Book Profits?

Navitas Semiconductor (NVTS) shares have rallied 90.3% in the past three months, outperforming the Zacks Electronics - Semiconductors industry’s growth of 14.9%. The stock also outperformed its industry peers, including Lam Research (LRCX), Marvell Technology (MRVL) and Ambarella (AMBA). In the past three months, shares of Lam Research, Marvell Technology and Ambarella have gained 36.2%, 23.4% and 21.7%, respectively.

Navitas Semiconductor has caught investors’ attention after a strong rally in recent months. The company’s focus on power chips for AI data centers and its shift to cost-efficient manufacturing have fueled optimism about its growth prospects. The outperformance of Navitas Semiconductor’s share price raises the question: Does it still have room to run, or is it time for investors to consider taking profits? Let us find out.

3-Month Price Return Performance

NVTS to Benefit From AI Data Center Boom

Navitas Semiconductor is shifting its focus to AI data centers as power needs are rising fast. AI processors are utilizing much more power than traditional systems. Additionally, during its second-quarter 2025 earnings call, NVTS stated that power demand for AI could grow from 7 gigawatts in 2023 to more than 70 gigawatts by 2030. This presents a big opportunity for Navitas Semiconductor to capitalize on this shift.

Currently, data centers operate at 48 volts, but NVIDIA has announced plans for 800-volt architectures to support next-generation workloads. Navitas Semiconductor believes that this shift will create a big need for advanced power chips made from gallium nitride (GaN) and silicon carbide (SiC). These materials work better at high voltage and make systems more efficient.

Navitas Semiconductor expects three stages in the new 800-volt setup, which includes converting grid power to 800 volts, then 800 volts to 48 volts, and finally 48 volts to 12 volts or less for processors. Each step will need GaN and SiC chips. Therefore, the company estimates that this could become a $2.6 billion yearly market by 2030. NVTS is already working on products for all three steps and plans to send final samples to customers later this year.

For now, Navitas Semiconductor expects its third-quarter revenues to be down due to tariff risks in China. However, looking ahead, these changes will help Navitas Semiconductor grow in the long term as AI data centers and energy systems expand. The Zacks Consensus Estimate for NVTS’ 2026 revenues is pegged at $66.68 million, indicating year-over-year growth of 23.2%.

NVTS to Benefit From its Shift to 8-Inch GaN

Navitas Semiconductor has started working with Powerchip to move its GaN chip production from 6-inch to 8-inch wafers. The goal here is to produce more chips at lower costs. The 8-inch wafers support the goal as they can produce about 80% more chips than the old 6-inch ones, without adding much to production costs. This move can result in better efficiency and margin gains for the company.

These mid-voltage GaN chips run on 80-200-volt power systems, which can easily support new AI data centers that require just 48-volt power. The company has also developed 800-volt high-voltage GaN chips that can power next-generation AI data centers. The production of these chips will be done in the Powerchip plant. A sample of chips is expected to be sent later this year, with plans to begin larger production in 2026.

The company’s current supplier, TSMC, will keep providing 6-inch wafers through at least mid-2027. This gives Navitas enough time to switch to Powerchip without supply problems. Over the next two years, most high-voltage GaN customers are expected to move to the new 8-inch process. This move forms part of Navitas Semiconductor’s plan to focus on higher-performance and higher-margin products. The company is cutting back on lower-margin mobile and consumer products to shift resources toward AI data centers and energy infrastructure.

Navitas Semiconductor believes the Powerchip partnership will enable the company to reduce costs while improving margins over time. If the transition goes as planned, the new 8-inch platform can support Navitas Semiconductor’s long-term goal of stronger margins and steady growth.

Valuation: NVTS Trades Above Industry and peers

Navitas Semiconductor is currently trading at a higher price-to-sales (P/S) multiple compared with the industry. NVTS’ forward 12-month P/S ratio sits at 33.21X, significantly higher than the industry’s forward 12-month P/S ratio of 8.81X.

NVTS Forward 12-Month P/S Ratio

Navitas Semiconductor stock also trades at a higher P/S multiple compared with other industry peers, including Lam Research, Marvell Technology and Ambarella. At present, Lam Research, Marvell Technology and Ambarella have P/S multiples of 8.49X, 8.55X and 8.61X, respectively.

Conclusion: Hold Navitas Semiconductor Stock for Now

Navitas Semiconductor is in a good position to benefit from the fast growth of AI data centers. Its GaN and SiC chips are well-suited for new high-voltage systems that need more efficient power use. Additionally, Navitas Semiconductor’s shift to 8-inch GaN wafer production with Powerchip should help the company make more chips at a lower cost and improve margins over time.

However, near-term challenges like tariffs and high valuation warrant a cautious approach to the stock. Nonetheless, the company’s focus on the AI data center boom supports its long-term potential, making it an attractive long-term hold.

Navitas Semiconductor currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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