DURHAM, North Carolina, August 23, 2026, 19:18 EDT
- Wolfspeed stock dropped 19.0% over the past week, ending Friday at $25.76.
- Revenue from AI data centers more than doubled in fiscal 2026, though the specific dollar figure has not been disclosed.
- The present quarter’s revenue, when annualized, falls 34% short of management’s projected gross-margin breakeven level.
- The average analyst price target of $16 is 37.9% lower than Friday’s closing price.
Wolfspeed, Inc. NYSE:WOLF shares dropped 19.0% last week to close at $25.76. The decline came after results revealed that surging AI demand has yet to fill the company’s factories. Revenue is currently around $202 million below management’s target for annual gross-margin breakeven.
This shortfall is the main challenge. Revenue totaled $149.6 million in the fourth quarter, which would equal $598.4 million if projected over a year. Chief Financial Officer Gregor van Issum said the breakeven point is around $800 million, varying with product mix.
The shares fell in each session following Monday. On Friday, the stock dropped 2.24%, before rising 0.78% in after-hours trading to $25.96. Trading volume hit 9.72 million shares after Thursday’s earnings report.
| Session | Close | Daily move | Volume |
|---|---|---|---|
| Aug. 17 | $34.96 | up 9.97% | 4.23 million |
| Aug. 18 | $31.46 | down 10.01% | 4.35 million |
| Aug. 19 | $29.09 | down 7.53% | 7.99 million |
| Aug. 20 | $26.35 | down 9.42% | 9.72 million |
| Aug. 21 | $25.76 | down 2.24% | 3.84 million |
AI data-center revenue more than doubled compared with fiscal 2025, increasing by roughly 20% from the previous quarter. Wolfspeed has not revealed the dollar amount for this segment, making it difficult for investors to assess its impact.
Wolfspeed Chief Executive Robert Feurle reported “strong growth in AI data center applications.” The company’s silicon-carbide devices are now qualified for use in LITEON Technology Corporation’s (TPE:2301) upcoming 800-volt data center power platform. Wolfspeed results; Wolfspeed-LITEON announcement
| Fourth-quarter measure | FY2026 | Comparison |
|---|---|---|
| Revenue | $149.6 million | Down 24.1% from a year ago |
| Power revenue | $106 million | Grew 6% from the previous quarter |
| Materials revenue | $43 million | Ongoing inventory transition |
| Adjusted gross margin | -19.9% | Improved 0.7 percentage point from the prior quarter |
| Adjusted EBITDA | -$62 million | Little change from quarter earlier |
| Operating cash flow | -$54 million | Reflects $41 million inventory benefit |
Factory utilization continues to be the limiting factor. Wolfspeed reported a 0.7 percentage point sequential increase in adjusted gross margin, but it remained at negative 19.9%. The operational costs of its factories continue to exceed generated gross profit.
The forecast for the September quarter provides little relief. Executives project revenue between $140 million and $160 million, with the midpoint of $150 million indicating no significant change. Adjusted gross margin is also expected to stay in negative territory.
| Revenue model | Quarterly rate | Annualized rate | Shortfall to $800 million |
|---|---|---|---|
| Q4 result | $149.6 million | $598.4 million | $201.6 million / 33.7% |
| Q1 forecast low | $140 million | $560 million | $240 million / 42.9% |
| Q1 forecast midpoint | $150 million | $600 million | $200 million / 33.3% |
| Q1 forecast high | $160 million | $640 million | $160 million / 25.0% |
The balance sheet offers a financial cushion. Cash and short-term investments stood at $1.09 billion, while gross debt reached about $1.69 billion, resulting in net debt of approximately $600 million. Capital expenditures dropped to $5 million in the fourth quarter, down from $38 million.
Debt comes at a high price. According to Van Issum, $630 million in first-lien debt carries an interest rate of approximately 16%. Management’s initial estimates suggest this results in about $101 million in yearly interest payments ahead of any refinancing.
Wall Street is split. Thirteen analysts are nearly evenly distributed among buy, hold and sell recommendations. The average target price is $16, representing a 37.9% discount to Friday’s closing level.
| Analyst recommendation measure | Reading | Implied move from $25.76 |
|---|---|---|
| Consensus | Hold | — |
| Buy ratings | 4 out of 13 | — |
| Hold ratings | 5 out of 13 | — |
| Sell ratings | 4 out of 13 | — |
| Average target | $16.00 | -37.9% |
| Newest disclosed target | $25.00 | -3.0% |
Risks: A surge in AI orders may exceed forecasts and boost factory usage. However, risks include sluggish adoption of 800-volt systems, ongoing softness in automotive markets, or additional equity conversions. These factors could postpone achieving positive gross margins and potentially dilute shareholder value.
U.S. markets remain shut on Sunday. The key test on Monday is if shares stay above Friday’s $25.44 low. Falling beneath this level would renew scrutiny of cash burn, while holding steady would redirect focus to the $200 million yearly revenue shortfall.
