Wolfspeed Stock: A Fragile Rebound Amid Financial and Operational Crosscurrents

Wolfspeed US9778521024

Wolfspeed shares continue to face headwinds following a difficult December, with their value declining by approximately one quarter over the last fortnight. Currently trading in a range around $17 to $18, the stock's attempted recovery is being hampered by persistent operational concerns and a skeptical market sentiment, despite a recent shareholder meeting that formally affirmed corporate governance.

A significant development for the company's balance sheet occurred on December 1. Wolfspeed received a cash tax refund of $698.6 million from the U.S. Internal Revenue Service (IRS). This substantial injection stems from the Advanced Manufacturing Investment Credit (AMIC) under Section 48D of the U.S. tax code.

The financial impact is multi-faceted:
* The company's cash and equivalents now stand at roughly $1.5 billion.
* A portion of the funds, $192.2 million, was allocated to debt repayment.
* Wolfspeed anticipates monetizing a total of about $1 billion in Section 48D tax credits.
* Following a bankruptcy restructuring concluded in September, the firm's financial liabilities have been reduced by approximately 70%.

This influx provides Wolfspeed with notable financial flexibility, even as its core business performance lags behind expectations.

Shareholder Endorsement Amid Broader Doubts

At the recent Annual General Meeting, shareholders approved all seven nominated members of the Board of Directors by clear majorities. This group includes CEO Robert A. Feurle and Chairman Anthony M. Abate, each of whom received between 15.7 million and 17.3 million votes.

Other proposals also gained strong support. An advisory vote on executive compensation passed with around 14.9 million votes. Furthermore, shareholders nearly unanimously confirmed PricewaterhouseCoopers LLP as the independent auditor for fiscal year 2026, with more than 20.4 million votes in favor.

Operational Hurdles: The Mohawk Valley Challenge

Counterbalancing these positive financial and governance signals, the operational landscape remains tense. Reports indicate that the crucial Mohawk Valley fabrication facility is currently running at only about 25% of its capacity. This low utilization rate fuels worries regarding the pace of the production ramp-up and the eventual profitability of the company's sites.

Wolfspeed emerged from Chapter 11 proceedings in September 2025, having slashed its debt burden by around 70% and reconfigured its capital structure. The company's ownership is now dominated by former creditors and financial investors, including Apollo Global Management and Renesas Electronics, who hold a majority stake.

Strategic Validation via Toyota Partnership

In a key business development on December 9, Wolfspeed announced a major supply agreement with Toyota. The company is set to provide silicon carbide MOSFETs for the Japanese automaker's battery-electric vehicle lineup. This deal is viewed as a validation of Wolfspeed's Gen‑4 SiC technology, addressing prior skepticism about its commercial rollout speed.

Concurrently, Wolfspeed introduced new 1200‑volt silicon carbide six-pack power modules designed for high-performance inverters. These product launches demonstrate that development efforts are progressing despite the recent corporate restructuring.

Wall Street Maintains a Cautious Stance

Analyst sentiment on Wall Street continues to be predominantly cautious. The average consensus recommendation stands at "Reduce," accompanied by a price target near $10.50—significantly below the current trading level. While Susquehanna maintains a "Neutral" rating, it raised its price target to $30 following the completion of the bankruptcy process.

For the second quarter of fiscal 2026, management has provided revenue guidance between $150 million and $190 million. This range falls notably short of analyst expectations, which averaged around $232 million. Company leadership further anticipates ongoing weakness throughout the entirety of fiscal 2026.

Upcoming Earnings: A Critical Test

All eyes are now on the next quarterly report, scheduled for February 4, 2026. This release will be pivotal in assessing whether Wolfspeed is making tangible progress in boosting capacity utilization at Mohawk Valley and executing its post-restructuring operational plan. The market will focus on two critical aspects: whether the company confirms or adjusts its revenue guidance, and if the technically significant support level around $17 per share holds following the earnings announcement.