Navitas Semiconductor (NVTS): Evaluating Valuation After Nvidia Partnership Fuels Growth Optimism

Navitas Semiconductor (NVTS) has drawn attention after revealing a partnership with Nvidia to jointly develop 800V HVDC architecture for AI data centers. The move highlights Navitas's expertise in Gallium Nitride technology, as well as its expanding reach in AI and electric vehicles.

See our latest analysis for Navitas Semiconductor.

The Nvidia partnership has clearly kicked investor excitement into higher gear, and optimism about Navitas’s next chapter is showing up in the numbers. Navitas’s share price got a meaningful boost from recent fund interest and news flow, and its 1-year total shareholder return of just over 2% hints at positive long-term momentum building, especially as the stock trades around $7.82 after some near-term volatility.

If you’re curious where the next surge in AI hardware might come from, now’s a great time to check out the See the full list for free.

But after the latest rally and fresh optimism, is Navitas now a genuine value play, or are markets already factoring in all that future AI-driven growth potential?

Most Popular Narrative: 16% Overvalued

Navitas Semiconductor's last close price of $7.82 sits well above the consensus fair value estimate of $6.74. This places heavy expectations for future growth on the stock. Investors are watching closely to see if the story behind this premium is as strong as its recent rally suggests.

Navitas Semiconductor's GaN business experienced significant growth in 2024, with a 50% increase in revenues driven by strong demand in mobile, consumer appliances, and data centers. This upward trend is expected to continue, potentially boosting future revenues.

Read the complete narrative.

What is driving such optimism? A surge in high-impact projects, an ambitious growth blueprint, and a bold profit trajectory are at the heart of this narrative. Dig deeper to see which numbers and assumptions support this elevated fair value. The next piece could completely change your view.

Result: Fair Value of $6.74 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, any further slip in gross margins or continued weakness in key end markets could seriously challenge the bullish case for Navitas going forward.

Find out about the key risks to this Navitas Semiconductor narrative.

Build Your Own Navitas Semiconductor Narrative

If the current analysis does not match your perspective or you want to take a hands-on approach, you can build your own view in just a few minutes. Do it your way

A great starting point for your Navitas Semiconductor research is our analysis highlighting 1 key reward and 4 important warning signs that could impact your investment decision.

Looking for more investment ideas?

Opportunities are always being uncovered by smart investors using Simply Wall Street’s screeners. Don’t miss out on fresh ideas that could impact your returns.

• Uncover companies that are rewarding shareholders with reliable payments by starting your search in these 19 dividend stocks with yields > 3%.
• Get ahead of the trends in artificial intelligence by finding promising players through these 24 AI penny stocks.
• Spot overlooked stocks with strong upside potential by tracking undervalued picks with these 896 undervalued stocks based on cash flows.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com