Is NVTS a Good Buy at $12.16?

Navitas has one of the most seductive stories in the semiconductor market.

AI data centers need more power. Traditional power conversion wastes energy and creates heat. Gallium nitride and silicon carbide can switch power faster and more efficiently. Navitas sells both.

The story is coherent.

The financial evidence is still early.

At $12.16, investors are valuing Navitas as though its 800-volt opportunity becomes a scaled business. The company has not yet proved that outcome.

What Navitas actually controls

Navitas develops GaN power integrated circuits and SiC power devices. These components can reduce the size, energy loss, and cooling burden of power conversion.

That matters in an AI data center because power does not move directly from the grid into the GPU. It is transformed repeatedly. Every conversion step can waste energy.

Navitas is positioning its technology for the shift toward high-voltage data-center architectures, including 800-volt distribution.

In fiscal Q2 2026, revenue was only $10.5 million. That was up 22% sequentially but down from $14.5 million a year earlier. High-power markets grew more than 50% year over year, and management guided Q3 revenue to $13.5 million, plus or minus $0.5 million.

Why does that matter?

Because the product thesis is moving in the right direction, but the starting scale is tiny relative to the valuation.

This is an option on adoption, not a proven compounder

Navitas ended Q2 with about $557 million of cash and no material financial debt. That gives the company time.

But time is valuable only if it produces commercial proof.

The company recorded a GAAP loss of $228 million, mostly because of a noncash earnout remeasurement. The cleaner non-GAAP net loss was $9.3 million. Management guided Q3 non-GAAP operating expense to $15.5 million to $17.5 million against roughly $13.5 million of expected revenue.

The business is not self-funding yet.

What $12.16 requires

The checked price implies an equity value of roughly $3.2 billion using about 261 million shares outstanding. After subtracting cash, enterprise value is approximately $2.6 billion.

Against a $54 million annualized Q3 revenue midpoint, that is roughly 48 times enterprise value to revenue.

For an early-stage company, I use fiscal 2031 and a 14% required annual return. The higher hurdle reflects adoption risk, customer concentration, losses, and future dilution.

At a 35 times terminal free-cash-flow multiple, today's price requires about $0.67 of fiscal 2031 free cash flow per share. On 300 million future shares, that is roughly $201 million of free cash flow. At a 25% margin, Navitas would need more than $800 million of revenue.

That is not impossible.

It is roughly fifteen times the current annualized guide.

Three possible outcomes

Conservative: about $0.39 today

Navitas reaches $250 million of fiscal 2031 revenue, a 5% free-cash-flow margin, and 330 million diluted shares. The market applies a 20 times cash-flow multiple.

This is the danger of an exciting technology that never achieves pricing power or manufacturing scale.

Base case: about $7.04 today

Navitas reaches $700 million of revenue, a 20% free-cash-flow margin, and 310 million diluted shares. The market applies a 30 times multiple.

This would be a major commercial success. It is still below the checked price.

Upside case: about $22.72 today

Navitas reaches $1.5 billion of revenue, a 25% free-cash-flow margin, and 300 million diluted shares. The market applies a 35 times multiple.

This requires 800-volt architecture to scale, Navitas to win meaningful content, and dilution to remain controlled.

At $12.16, the market is pricing an outcome between my base and upside cases.

It is paying for execution before execution is visible in the income statement.

Dilution is the cost investors can see today

Shares outstanding increased to roughly 261.1 million in July from 230.5 million at year-end. Average shares in Q2 were about 240.6 million, up from 199.0 million a year earlier.

That is not a footnote.

An early-stage company can grow revenue quickly while per-share value grows slowly if it repeatedly funds the journey with new equity.

The cash balance reduces near-term financing risk. It does not erase dilution already incurred or guarantee that future capital will not be needed.

What to watch out for

Named 800-volt design wins that progress into production revenue - because announcements must become shipments.
AI infrastructure revenue as a share of total sales - because management expects these categories to become about one-third of sales by year-end 2026.
Quarterly gross margin, operating expense, and cash burn - because scale should improve economics.
Customer concentration and manufacturing partners - because small suppliers can be vulnerable even with superior devices.
Diluted shares and equity compensation - because the denominator is part of the thesis.

What could change the thesis

The thesis would strengthen if design wins convert into recurring AI revenue, gross margin expands, and the company reaches a credible path to cash breakeven without another large increase in shares.

The thesis would weaken if 800-volt adoption is delayed, large customers choose internally qualified incumbents, or operating expense grows faster than revenue.

The evidence that matters is paid production volume.

Bottom line

Navitas may control an important piece of the next data-center power architecture.

Technology potential: high.

Commercial proof: early.

Balance sheet: cash rich.

Dilution risk: already visible.

Valuation: above my base case and dependent on a large 800-volt revenue ramp.

At $12.16, NVTS is not priced as a promising lab. It is priced as a future scaled supplier.

The practical principle: when revenue is small and the addressable market is enormous, underwrite the path between them - especially the shares issued along the way.

Sources

Scenario values are analytical estimates, not company guidance or price targets. Educational only - not financial advice.

NVTS at $12.16