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Deutsche Bank (ETR:DBKGn) downgraded Navitas Semiconductor (NASDAQ:NVTS) from Buy to Hold on Monday, while raising its price target to $7.00 from $3.50. The rating change follows a remarkable performance, with the stock posting returns of 120% over the past six months and 68% over the last year. According to InvestingPro data, the stock currently trades at $7.19, near Deutsche Bank’s new target.
The stock surge came after Navitas announced a collaboration with Nvidia (NASDAQ:NVDA) on next-generation 800V HVDC architecture for AI factories. Deutsche Bank views this partnership as a strong endorsement for Navitas’ unique combination of gallium nitride (GaN) and silicon carbide (SiC) technologies. InvestingPro analysis indicates the company maintains strong financial flexibility with a current ratio of 5.61 and more cash than debt on its balance sheet.
Data center-related revenue for Navitas remains relatively small but is growing rapidly. Deutsche Bank estimates this segment will generate approximately $10 million in 2025, $30 million in 2026, and $45 million in 2027.
The bank believes the data center market represents a potentially lucrative long-term opportunity for Navitas, with a total addressable market possibly reaching several hundred million dollars by 2027 and beyond.
Deutsche Bank noted that while the collaboration with Nvidia is not exclusive, it increases the likelihood of Navitas gaining meaningful market share in the data center power segment over the long term. Based on InvestingPro’s Fair Value analysis, the stock appears to be trading near its fair value, with a market capitalization of $1.38 billion.
In other recent news, Navitas Semiconductor reported its first-quarter 2025 earnings, meeting market expectations with a loss per share of $0.06 and revenue of $14 million. The company highlighted significant innovations, including the introduction of the first bidirectional GaN IC, which could drive future growth. Navitas has also announced a collaboration with NVIDIA to develop an 800V high-voltage direct current architecture for AI data centers, aiming to improve energy efficiency and reduce maintenance costs. Additionally, Navitas appointed Cristiano Amoruso to its board of directors, bringing experience that could support the company’s expansion into sectors like data centers and electric vehicles.
Meanwhile, Needham revised Navitas’ price target to $3.00 from $4.00, maintaining a Buy rating despite concerns over tariff volatility and a postponed solar opportunity. The firm noted that Navitas’ supplier footprint exposes it to trade uncertainties, particularly affecting its silicon carbide segment. Navitas’ management acknowledged the potential impact of tariffs, but emphasized that the risk remains limited unless the ’country of origin’ designation changes.
The company also outlined its financial strategy, maintaining a strong balance sheet with $75 million in cash and no debt. Looking ahead, Navitas expects revenue growth to resume in late 2025, driven by demand in solar microinverters and electric vehicle applications, with a target to reach EBITDA breakeven by 2026. These developments reflect Navitas’ strategic focus on leveraging its GaN and silicon carbide technologies to capture opportunities in emerging markets.
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