Navitas Semiconductor: Another Boom And Bust Likely - Wait For Dips

Summary

• NVTS' partnership with NVDA offers great long-term growth potential, albeit with minimal near-term financial impact, since Rubin Ultra will only be launched from 2027 onwards.
• While the management has highlighted $450M of new lifetime design wins and a growing pipeline of $2.4B in 2024, these will only be accretive from H2'25 onwards.
• NVTS' ongoing cash burn and deteriorating balance sheet are likely to trigger further dilutive capital raises, with the management potentially taking advantage of the recent stock price rally.
• Combined with the drastically higher short interest volume and the overly expensive valuations, we believe that another boom and bust is likely in the near-term.
• Traders are likely to take their gains off the table as well, with interested investors better off waiting for low-single digits.

MediaProduction

NVTS' Rally Occurred Overly Fast & Furious - Improved Opportunities Ahead

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Analyst’s Disclosure: I/we have a beneficial long position in the shares of NVDA either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

The analysis is provided exclusively for informational purposes and should not be considered professional investment advice. Before investing, please conduct personal in-depth research and utmost due diligence, as there are many risks associated with the trade, including capital loss.