Navitas Semiconductor Clears a Key Hurdle as AI Power Demand and Short Covering Lift Shares 10%

Navitas stock jumped after Vicor's raised guidance reinforced AI power chip demand and a SPAC earnout settlement removed uncertainty, triggering a short squeeze. Q1 revenue rose 18% sequentially.

A pair of catalysts converged on Navitas Semiconductor Tuesday, sending shares sharply higher as one long-running overhang was resolved and a peer’s upbeat forecast reinforced the AI-driven demand story for its power chips.

The stock surged as much as 10.3% during the session before closing at $31.79, a gain of 8.7%. Trading volume exploded to 49.7 million shares — roughly 77% above the average daily turnover — as short sellers scrambled to cover positions in a heavily shorted name.

Two triggers, one rally

The immediate spark came from outside the company. Vicor, a supplier of power solutions for Nvidia data centers, raised its second-quarter revenue guidance by 24%, from $126 million to $142 million. Navitas is also seen as a Nvidia partner for data-center power electronics, so the market quickly extrapolated the brighter industry backdrop onto the stock.

But a structural overhang also shrank. On May 18, Navitas disclosed a settlement with its former SPAC sponsor Live Oak regarding earnout provisions left over from the de-SPAC transaction. The company will issue approximately 3.28 million shares, with Live Oak receiving about 726,000 of them and another 116,000 shares being forfeited. The agreement includes mutual releases and reorganizes the earnout terms that had weighed on the company’s capital structure since its public listing.

Market participants viewed the settlement as removing a source of uncertainty that had discouraged potential investors. Combined with a short interest that is high relative to the free float, the resolution triggered a short-covering squeeze that amplified the day's gains.

Powering the AI frenzy

Navitas is leaning hard into the narrative that artificial intelligence’s insatiable appetite for electricity will require a new generation of more efficient power semiconductors. The company is shifting its focus under a strategic reboot it calls “Navitas 2.0,” moving away from mobile and consumer devices toward high-performance chips for data centers and other energy-hungry applications.

Its technology arsenal includes gallium nitride (GaN) and silicon carbide (SiC) solutions. At the PCIM 2026 trade show, Navitas showcased GaNFast, GaNSafe and GeneSiC platforms targeting 800-volt DC architectures in AI data centers. The company also demonstrated power boards capable of 10 and 20 kilowatts, and a system that converts 800 volts to 6 volts with a peak efficiency of 97.5%. The goal is to eliminate intermediate power stages, boosting compute density and reducing waste heat.

The story is compelling, but execution remains a work in progress.

Financial reality check

In the first quarter of 2026, Navitas reported revenue of $8.6 million, an 18% sequential increase from the final quarter of 2025. On a GAAP basis, the operating loss came in at $27.8 million, a notable improvement from the prior quarter’s $41.4 million deficit. The net loss was $33.8 million, or $0.04 per share — a penny better than analyst expectations.

For the current quarter, management guided for roughly $10 million in revenue. That is growth, but it underscores how early the company is in its scaling journey. Navitas ended the quarter with more than $220 million in cash and virtually no debt. Still, according to projections from S&P Global Market Intelligence, sustained profitability may not arrive until 2030.

Wall Street remains divided

The stock has now more than quadrupled since the start of 2026, leaving most analyst price targets in the dust. The consensus target stands at $12.87, with Needham & Company at $21 (Buy), Baird at $20, Rosenblatt Securities at $13 (Neutral) and Morgan Stanley at $13.70 (Underweight). Analyst Joseph Moore of Morgan Stanley highlighted the valuation, calling it roughly 60 times 2027 estimates, and flagged risks tied to a transition in foundry partners.

Insider selling has also tempered the enthusiasm. The CFO and several directors sold shares worth several million dollars in the past quarter — not necessarily a vote of no confidence, but a data point that cools the euphoria.

A live test awaits

Management has two upcoming opportunities to pitch the “Navitas 2.0” strategy to institutional investors. CEO Chris Allexandre and CFO Tonya Stevens are slated to appear at the Craig-Hallum Institutional Investor Conference in Minneapolis on May 28, followed by the Evercore Global TMT Conference in San Francisco on June 3.

These presentations will be more than routine dog-and-pony shows. After the earnout cleanup and a stock that is pricing in huge future growth, investors will be looking for tangible evidence that the AI power story is translating into orders, not just ambition.