Navitas Semiconductor Corp (NASDAQ: NVTS) soared about 30% on Monday after announcing plans of reporting its second-quarter financial results on August 4th.
Estimates are for the next-gen power semiconductor company to lose 5 cents a share in its current quarter on $14.4 million in revenue.
However, scheduling the earnings release rarely sparks such a dramatic rally.
Still, Navitas stock is defying all odds today and it may have its larger peer, Texas Instruments Inc (NASDAQ: TXN), to thank for it.
TXN upgrade lifts Navitas stock
Navitas shares may be experiencing a cosmic run this morning due to a broader shift in sentiment toward the power semiconductor space.
On Monday, experts at Seaport Global Securities upgraded a more established name within that market, Texas Instruments, to “neutral”, citing improving inventory conditions and a more stable macroeconomic outlook.
Investors may be extrapolating this positive outlook to NVTS stock, assuming if TXN is seeing signs of recovery, smaller players like Navitas could benefit too.
Simply put, the Seaport upgrade may be serving as a proxy signal for improving fundamentals across the sector – making investors believe Navitas will come in ahead of expectations on August 4th.
And since Navitas Semiconductor is a high-alpha stock, it may outperform the broader market as the backdrop continues to improve, especially if it comes in ahead of estimates for its fiscal Q2.
NVTS shares have other catalysts too
Navitas stock may be worth owning despite its monster rally over the past two months, also because it has a few idiosyncratic tailwinds as well.
For example, the company based out of Torrance, California, teamed up with the AI darling, Nvidia, this year on 800V architecture for artificial intelligence data centres.
The partnership has been drawing attention as it positions NVTS as a niche supplier in high-growth markets.
Put together with a strong Q2 release on August 4th, investors may have strong enough reasons to load up on the semiconductor stock in the back half of 2025.
That said, NVTS shares do not currently pay a dividend, though.
Valuation remains a concern for Navitas
Despite the aforementioned positives, valuation metrics continue to suggest investors should pull out of Navitas shares before the gains potentially reverse in the months ahead.
At the time of writing, shares of the power management chips firm are going for a price-to-sales (P/S) multiple of more than 14 – well above both Texas Instruments and the industry average at large.
Additionally, caution is warranted in buying NVTS stock at current levels also because the Nasdaq-listed company is expected to remain unprofitable for another few years.
Note that Navitas Semiconductor is currently trading more than 100% above the analysts’ average price target – further indicating the management has a super thin margin for error moving forward.
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