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New: Introducing “Why Is It Moving?” - lightning-fast, AI-driven explanations of stock moves
Navitas stock climbed today despite bearish pressures shaping the broader market.
Investors continue to bet on the company's opportunities in the AI market.
Navitas' huge rally has pushed its valuation to highly growth-dependent levels.
Navitas Semiconductor (NASDAQ: NVTS) stock managed to defy bearish momentum impacting the broader market and close out Thursday's trading in the green. The artificial intelligence (AI) company's share price climbed 2.7% in the day but had been up as much as 10.8% earlier in the session. Meanwhile, the S&P 500 fell 0.7% on the day, and the Nasdaq Composite declined 0.5%.
While there wasn't any business-specific news pushing Navitas stock higher today, the company's valuation hot streak has continued. Its share price is now up more than 520% in 2025.
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Image source: Getty Images.
The broader market saw sell-offs in Thursday's trading as investors reacted to signs of financial weakness for regional banks and ongoing concerns that relations between the U.S. and China could continue to deteriorate. Navitas has been on a big winning streak thanks to strong financial results and news of partnerships with Nvidia and other key players in the AI processing market.
Navitas has been posting very strong sales and earnings momentum in conjunction with AI infrastructure buildouts. The company's chips help to accelerate information processing and transfers at AI data centers, and it could continue to see strong demand for its connectivity-enabling hardware. On the other hand, the company's valuation has become hugely growth-dependent on the heels of recent gains.
Following an explosive rally, Navitas stock is now valued at approximately 61 times this year's expected sales. While the company's long-term outlook holds plenty of promise, its valuation could set the stage for downside if growth comes in below expectations or if the broader market takes a strong bearish turn.
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Keith Noonan 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.
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