Wolfspeed (WOLF -2.48%) is yet another company feeling the impacts of the slower-than-expected expansion of the EV industry.
WOLF suffers from softness in the industrial and energy markets, as well as widening losses and a cautious outlook.
Wolfspeed (WOLF -3.91%) and IonQ (IONQ -16.77%) aren't generally considered artificial intelligence (AI) stocks. Wolfspeed is a leading manufacturer of silicon carbide (SiC) chips, which are often associated with electric vehicle (EV) powertrains.
Wolfspeed (WOLF -8.56%), a producer of silicon carbide (SiC) chips, was once a red-hot semiconductor stock. Its shares surged to a record high of $141.87 on Nov. 16, 2021, clocking in a near-470% gain over the previous five years.
Shares of electric vehicle (EV) stocks were on the rise Thursday, including Rivian (RIVN 5.93%) and EV-related power chipmakers Wolfspeed (WOLF 16.56%) and Indie Semiconductor (INDI 5.65%). These stocks were up 5.7%, 14.9%, and 5.1%, respectively, as of 1:30 p.m.
Semiconductor stocks are a hot area to invest in thanks to the emergence of new industries, such as electric vehicles (EVs), renewable energy, and artificial intelligence. Consequently, many of these stocks experienced skyrocketing share prices, making it hard to find bargains in this sector.
WOLF benefits from strong EV demand, key partnerships, and Gen 4 tech amid challenges in industrial markets and factory underutilization.
Wolfspeed remains poised for strong growth in the EV ecosystem despite short-term struggles and a CEO transition with a viable path to profitability. The company reported mixed FQ2 results, with revenues down 13% YoY, but maintains a massive $30 billion order book and strong future prospects. Wolfspeed's limited future capital requirements and significant cost cuts position it for EBITDA positivity at $1 billion in sales, reducing financial survivability fears.
The transformative power of artificial intelligence (AI) is undeniable. A recent McKinsey & Company research report estimates generative AI alone could add $2.6 trillion to $4.4 trillion in annual value across analyzed use cases -- comparable to the United Kingdom's entire gross domestic product.
Wolfspeed (WOLF) came out with a quarterly loss of $0.95 per share versus the Zacks Consensus Estimate of a loss of $1.01. This compares to loss of $0.55 per share a year ago.