Why Navitas Semiconductors Doubled in 2025

Shares of small-cap semiconductor designer Navitas Semiconductors (NASDAQ: NVTS) rallied 100% exactly in 2025, according to data from S&P Global Market Intelligence.

Navitas began 2025 as an underfollowed, low-growth, loss-making chip designer of power semiconductors, primarily targeting the Chinese mobile handset market.

However, 2025 saw the narrative completely change, after Navitas was named by Nvidia (NASDAQ: NVDA) as a candidate to partner on Nvidia's next-generation AI data center design. During the year, Navitas' surging stock price enabled it to raise more capital, while the board replaced its CEO in order to move more quickly toward the new AI data center opportunity.

Navitas embarks on a transformation, and investors are believers

On May 20, Nvidia published a blog post outlining the need for a new 800-volt data center architecture, designed to power megawatt-scale server racks. Nvidia claims it will need this higher-voltage data center architecture by 2027, when it will deploy its 576-Rubin Ultra chips in a single rack, called Kyber.

As part of that blog post, Nvidia named several power semiconductor companies as potential partners on the new design, including Navitas. Navitas was among the smallest names on the list and had been posting weak financial results up until that point. Therefore, the prospect of a possible partnership with Nvidia sent the stock soaring.

Navitas took advantage of its higher stock price to raise $100 million through an equity offering at the time. Then later in the year, after another stock surge, Navitas raised another $100 million through a private placement equity sale, bringing the full-year capital raise to $200 million. Before the November raise, Navitas had over $150 million in cash on the balance sheet, so the company likely currently has about $250 million in its coffers and no debt.

The money will be needed, as Navitas moved quickly to a new business model with a new CEO. In August, Navitas' board appointed Chris Allexandre as the company's CEO. Allexandre has deep experience as an executive in the power and auto-focused semiconductor space, and will replace Navitas' founder Gene Sheridan.

A little more than a month after Allexandre's appointment, Navitas issued a press release noting "progress" on its medium and high-voltage gallium nitride (GaN) and silicon carbide (SiC) devices to serve Nvidia's new 800V data centers. Navitas announced its 100V and 650V GaN chip designs, as well as its new GeneSic portfolio of SiC devices for the new data center design.

Navitas' stock rallied 26% that day -- its most consequential stock price move since the May announcement by Nvidia.

Image source: Getty Images.

But the stock has moved before the numbers have

Despite the huge rally in the stock, Navitas still posted just $10 million in revenue in Q3, while guiding for $7 million in the fourth quarter. Allexandre noted that the company is purposefully moving resources away from its legacy business and devoting resources to the new data center opportunity, and that revenue should begin reversing course back to growth in 2026.

However, given that the new Nvidia data center design will only begin to hit the market in 2027, and that Navitas isn't guaranteed to be the vendor of choice for these new chips, there is still considerable risk in this name. If, for some reason, Nvidia's new design isn't needed or if Nvidia chooses a different power chip source, that would be a big risk to Navitas.

Billy Duberstein and/or his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.