NVTS Trades at Premium Valuation: Should You Hold or Fold the Stock?

Navitas Semiconductor NVTS is currently trading at a high price-to-sales (P/S) multiple compared with the Zacks Electronics - Semiconductors industry. Navitas Semiconductor’s forward 12-month P/S ratio sits at 49.54X, significantly higher than the industry’s forward 12-month P/S ratio of 8.26X. The Zacks Value Score of F also suggests that NVTS stock is overvalued.

Navitas Semiconductor stock trades at a higher P/S multiple compared with other industry peers, including Lam Research LRCX, Applied Materials AMAT and FormFactor FORM. At present, Lam Research, Applied Materials and FormFactor have P/S multiples of 11.58X, 8.46X and 7.69X, respectively.

NVTS Forward 12-Month P/S Ratio

Navitas Semiconductor’s elevated valuation raises concerns about whether the stock can justify such lofty multiples. Considering the premium valuation, investors must be wondering whether they should buy, hold or sell the stock, especially amid near-term challenges.

Mobile Business Exit to Hurt NVTS' Near-Term Prospects

Navitas Semiconductor has decided to walk away from its low-margin mobile products to focus its resources on high-power business. This strategic decision is hurting the company’s top-line growth. In the third quarter of 2025, NVTS’s revenues decreased 53.4% year over year to $10.1 million, reflecting adverse impacts from its strategic decision to deprioritize its lower-margin China mobile business.

The company projects a further decline in its revenues in the fourth quarter of 2025. Navitas Semiconductor expects fourth-quarter 2025 revenues to be $7 million (+/- $0.25 million), down significantly on a sequential basis as the company is pruning its low-margin mobile business to align its resources toward high-power business.

Navitas Semiconductor’s decision to prune its mobile business seems to have weighed on investors’ sentiments, as reflected by a decline in NVTS’ share price over the past three months. NVTS stock has plunged 11% over the past month, underperforming the industry’s decline of 2.7%.

The stock has underperformed its industry peers, including Lam Research, Applied Materials and FormFactor. Shares of Lam Research, Applied Materials and FormFactor have returned 3.8%, 7.6% and 31%, respectively.

1-Month Price Return Performance

However, for investors, not everything is gloom and doom.

Rising Demand in Data Centers Boosts NVTS’ Prospects

Navitas Semiconductor is shifting its focus toward high-power markets, such as AI data centers, performance computing, energy and grid infrastructure, and industrial electrification. This strategic move aligns with the company’s “Navitas 2.0” strategy, under which the company is reallocating resources toward high-power markets, pruning lower-margin mobile business, and working more closely with hyperscalers, graphics processing unit vendors and system OEMs.

Navitas Semiconductor’s inclusion in NVIDIA’s new 800-volt AI factory ecosystem is an important step. The new architecture shifts data center power distribution from traditional AC/DC stages to a high-voltage DC approach that requires faster, more efficient power electronics. This creates an opening for Navitas Semiconductor’s gallium nitride (GaN) and high-voltage silicon carbide (SiC) technologies, both of which are now part of the NVIDIA-led ecosystem.

In the third quarter of 2025, Navitas Semiconductor highlighted that it is one of the few companies offering both GaN and SiC solutions across the full power path from the grid to the graphics processing unit. The company has begun sampling mid-voltage GaN devices at 100 volts, which target the last stage of power conversion inside AI servers. It is also sampling 2.3 kV and 3.3 kV SiC modules for grid and energy storage applications that support these new data center designs.

NVTS expects 2026 to be a transition year, with small but growing shipments tied to traditional server power supplies. The larger opportunity depends on how fast hyperscalers adopt the 800-volt architecture and will depend on Navitas Semiconductor's ability to secure multi-generation design wins.

NVTS to Benefit From Strategic Partnerships

Navitas Semiconductor is strengthening its position in high-power markets through strategic partnerships. In mid-December, Navitas Semiconductor expanded its distribution relationship with Avnet, making the latter a globally franchised distribution partner. Under the deal, Avnet will provide technical and commercial support for NVTS’ GaN and SiC products across regions.

In early December, NVTS entered into a long-term strategic partnership with Cyient Semiconductors to accelerate GaN adoption in India. The two companies plan to co-develop GaN products, system modules and design platforms aimed at high-voltage, high-power markets, such as AI data centers, electric mobility and grid infrastructure.

In late November, Navitas Semiconductor expanded its partnership with WT Microelectronics in Asia. NVTS is consolidating its distributor base, and WT Microelectronics will take the lead for customer engagement and logistics in Asia, per the partnership agreement. This collaboration is meant to improve support for high-power customers in the region.

In mid-November, Navitas Semiconductor announced a long-term partnership with GlobalFoundries. Under this collaboration, the two companies will develop and manufacture next-generation GaN power devices at Global Foundries’ Vermont facility, with development planned for early 2026 and production expected later that year.

These partnerships bode well for the company's prospects as Navitas Semiconductor is trying to prepare for future demand. Through these strategic partnerships, NVTS aims to strengthen its supply chain, improve customer access, and prepare for large future opportunities, once high-power markets begin to scale in 2026 and 2027.

Key Technical Indicator Signals Bullish Trend for NVTS

NVTS shares are trading above their 50-day & 200-day moving averages, a bullish technical signal that indicates the potential for continued upward momentum in the near term.

NVTS 50-Day & 200-day Simple Moving Average

Conclusion: Hold Navitas Semiconductor Stock Right Now

Navitas Semiconductor is in a good position to benefit from the fast growth of AI data centers and is making steady progress through its strategic partnerships, which bode well for the company’s prospects and support its long-term growth plans. The company’s GaN and high-voltage SiC products now play a role in NVIDIA’s new 800-volt power setup, which shows that the technology is relevant and in demand.

However, Navitas Semiconductor’s premium valuation warrants a cautious approach to the stock.

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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