Navitas Soars 78% on NVIDIA Update: Is This Rally Sustainable?

Key Points

• Navitas's "NVIDIA bump" has led shares to rise well north of 700% in half a year.
• Shares just gained nearly 80% in one trading week as the company provided more details about its NVIDIA-linked products.
• However, with the company now valued at over $3 billion, what is the outlook on this high-flying name?

Navitas Semiconductor NASDAQ: NVTS has been one of the hottest stocks in the market thanks to its newly established relationship with NVIDIA NASDAQ: NVDA.

Navitas’s “NVIDIA bump” has been absolutely staggering, with shares up almost 750% in the past six months. Back in May, NVIDIA included Navitas on a list of suppliers that it would use to reshape power utilization in data centers, causing shares to spike 164% in one day.

In mid-October, Navitas shares got their latest NVIDIA-induced shot in the arm. In the trading week beginning on Oct. 13, NVTS stock catapulted another 78%, as the company released further details around its NVIDIA pact. But is this rally sustainable—or has speculation gotten ahead of fundamentals?

Navitas Spikes on Product Update and Manufacturing Readiness

On Oct. 13, Navitas unveiled its new products that are “purpose-built” for NVIDIA’s 800 Volts of Direct Current (VDC) AI factory architecture. This new architecture is a transformation of how electricity enters and flows through data centers. By cutting out several power conversions, it reduces energy loss and allows for denser deployment of computing power.

This is key as energy and computing power needs increase over time. To help enable this new architecture, Navitas discussed its new 100-volt Gallium-Nitride (GaN) field-effect transistor (FET) portfolio.

The company says they deliver "superior efficiency, power density, and thermal performance," all key to NVIDIA’s new architecture. It also announced a key partnership with Power Chip, which enables scalable and high-volume manufacturing of the product.

Overall, the fact that Navitas has already developed and lined up manufacturing for this new product excited markets significantly. It indicates progress toward the company generating real revenues through its NVIDIA partnership. 

Why Navitas Could Keep Gaining

Examining Navitas’s past price action helps support the idea that shares can move even higher.

The stock’s initial 164% move on May 22 sent it to a price of $5.05. After dropping to $4.41 the next day, likely due to profit taking, shares have never closed below $5.05 since. In fact, they continued rising big-time. Shares moved up another 63% to $8.23 on Oct. 10, the trading session before Navitas’s latest NVIDIA announcement. Even after shares gained 47% on May 27, they still rose another 27% through Oct. 10.

Clearly, the market was unwilling to bid Navitas shares below the level they achieved after the first NVIDIA announcement. Shares rose higher, despite a lack of any significant catalyst for nearly three months. This shows that most investors don’t want to bet against the potential of Navitas’s NVIDIA partnership. That fact provides a level of confidence that the stock could continue rising after its latest NVIDIA catalyst.

Analysts Caution: NVTS Valuation May Be Getting Stretched

Several other indicators suggest that Navitas shares should not have gained so much from this announcement.

First, the MarketBeat-tracked consensus price target on Navitas is $5.65, implying massive downside potential in shares of around 61%. Even the most bullish $8 target implies 45% downside. This comes as Wall Street analysts have yet to issue price target updates on Navitas’ shares after the firm’s latest announcement.

It's possible that analysts simply haven’t gotten around to lifting their price targets. Navitas is still a relatively small $3.1 billion chip stock and may not be a high-priority name for analysts. However, the lack of updates could also mean that these analysts view Navitas’s announcement as incremental, not transformational.

Markets already knew that Navitas and NVIDIA had a relationship, and the new details in the Oct. 13 announcement are relatively limited. It is an encouraging sign that Navitas is making progress and has secured a manufacturing partner.

Still, the company didn’t announce anything groundbreaking, such as a production ramp or actual sales guidance. Due to this, it's highly arguable that the announcement did not warrant a 78% gain in shares. This suggests that Navitas’s stock price trajectory in the near term could be down rather than up this time around.

High Risk, High Reward Ahead

Overall, multiple factors above point to the idea that shares are overbought. Still, a relationship with NVIDIA is one of the most valuable things a company can have in the current market. But so far, the stock’s rise has been driven more by potential than performance.

Navitas is set to report earnings on Nov. 3, and this could be the next major catalyst. Investors will be watching closely for financial guidance tied to the NVIDIA partnership—including revenue projections, production timelines, or design win confirmations. This could send shares flying higher again if the numbers impress, or crater if they don’t live up to high expectations.

Either way, the earnings report will serve as a key litmus test of whether the hype surrounding the NVIDIA deal is backed by real business momentum. Ultimately, Navitas remains a high-risk, high-reward opportunity.