Navitas Semiconductor (NASDAQ:NVTS) The stock has seen huge gains over the past week of trading. The company’s stock price jumped 78.1% from its valuation level at the end of the previous week’s market close.
Navitas issued a press release on October 13 announcing that it was supplying new chips for Nvidia’s next-generation artificial intelligence (AI) factory computing platform. Thanks to the recent rally, the stock is now up about 311% year to date.
Navitas shares recently climbed after the company announced that it is supplying gallium nitride (GaN) and silicon carbide (SiC) power semiconductors that will be used in Nvidia’s next-generation data centers. Nvidia continues to be the undisputed leader in advanced graphics processing units (GPUs) used to power AI data centers, and entering into a new partnership in the artificial intelligence space appears to be a big win for Navitas.
Following recent gains, Navitas now has a market capitalization of approximately $3.1 billion. At this valuation level, the company trades at around 64 times expected sales for this year.
With its latest trading update, Navitas projected third-quarter revenue of $10 million. This target actually suggests a significant sequential decline in quarterly sales compared to the company’s second-quarter revenue of $14.5 million.
Despite the sales decline, investors are betting that Navitas’ growth is poised to reaccelerate in the not-too-distant future. It’s not unusual for a relatively small chip company to see uneven business performance during early growth stages, and shareholders are betting that Navitas’ partnerships and winning designs will generate bigger gains.
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