Wolfspeed’s stock (NYSE: WOLF) is kick starting the new week of trading with further gains, up 6.28% through the early part of pre-market. On Friday, WOLF closed at $4.46, marking an impressive 24.41% surge from the previous day’s close of $3.60. The move was supported by heavy volume, with 79.37 million shares changing hands, three times the average daily volume of 26.61 million.
Despite a 1 month rally that has hit 72.2% leading into today’s session, and has seen WOLF more than double off the 52 week lows of $2.06; the stock continues to trade negative on a YTD basis (-32.73%), and has shown a steep drop over the past year, down 82.81%.
The company, a pioneering force in silicon carbide (SiC) and gallium nitride semiconductor technologies, has found itself at the epicenter of market volatility in 2025. Once a darling of the electric vehicle (EV) and power electronics boom, Wolfspeed’s stock has experienced a dramatic reversal of fortune, underscored by sharp price swings, mounting losses, and a critical leadership transition.
As the company prepares for its pivotal Q3 earnings call on May 8, investors are weighing the risks and opportunities that define Wolfspeed’s precarious position in the semiconductor landscape.
Markets are looking for -$0.82 in EPS for the period, coming against revenue of $185.77 million. Both figures would reflect a slow but steady improvement on the previous print, should the company come in on target.
Technical indicators flash caution: a 14-day Relative Strength Index (RSI) of 71.2 signals overbought conditions, while the “death cross” (50-day SMA below the 200-day SMA) observed in March 2025 underscores persistent bearish sentiment among long-term investors. Still, short-term momentum, as indicated by a bullish MACD histogram, suggests that opportunistic traders see value in the current volatility.
Financial Performance and Restructuring Efforts
On May 1, 2025, Wolfspeed announced that Chief Financial Officer Neill Reynolds will step down effective May 30, 2025, to pursue another opportunity. Reynolds will remain through the transition period, including participation in the fiscal Q3 earnings call on May 8, as the company negotiates with lenders to strengthen its capital structure. Executive Chairman Thomas Werner emphasized Reynolds’ role in “liability-management initiatives,” underscoring the urgency of addressing Wolfspeed’s $575 million convertible debt and $2.5 billion in long-term obligations.
Mounting Losses and Cost-Cutting Measures
Wolfspeed’s Q2 fiscal 2025 results revealed a net loss of $282 million, with revenue dropping 7% year-over-year to $180.5 million. Gross margins remain negative (-21% GAAP), driven by $28.9 million in underutilization costs at its Mohawk Valley fab. To stem losses, the company announced:
- Layoffs: 180–190 employees, primarily in materials operations, as part of a broader restructuring.
- CapEx Reductions: Targeting $150–$200 million in fiscal 2026 and $30–$50 million in 2027.
- Facility Closures: Shuttering its Durham, North Carolina, 150mm fab and suspending plans for a German plant.
These measures aim to achieve breakeven at $800 million annual revenue by 2027, but analysts remain skeptical. Goldman Sachs maintains a $8 price target, while the consensus forecast of $5.70 reflects perceived upside in the stock from current price action.
- Bull Case: Piper Sandler and Goldman Sachs highlight Wolfspeed’s SiC leadership and $1.3 billion in design wins.
- Bear Case: Bank of America Merrill Lynch cites “slower-than-expected EV demand” and a $6 price target.
Wolfspeed’s future hinges on executing its restructuring plan and capitalizing on federal support. While the CHIPS Act funding provides a lifeline, persistent losses and leadership instability cloud the outlook. Short-term volatility is likely to persist, but long-term investors may find value if the company achieves its 2027 profitability targets.
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