What’s going on with Navitas stock and why is it up 78%?

This former penny stock is up 78% this week and 322% YTD.

About a year and a half ago, we called out Navitas Semiconductor as a penny stock to watch, saying it could more than double in a year.

That indeed turned out to be the case, as we chronicled in an article this past May.

Now, Navitas, which makes high-performance silicon carbide and gallium nitride chips, is on the move again, rising 78% this week alone. What is behind the latest move for this high-flying chipmaker?

A 78% surge

Navitas stock was trading at around $8.23 per share when the market closed on Friday, October 10. On Wednesday afternoon, October 15, it was trading at roughly $14.63 per share – up 78% in just two trading days, as the markets were closed on Monday for Columbus Day.

The stock price surged some 26% on Tuesday and rose another 17% on Wednesday. The rapid rise stems from a deal that the chipmaker inked with AI behemoth Nvidia (NASDAQ: NVDA) back in May of this year.

That deal had Navitas providing Nvidia with its proprietary gallium nitride (GaN) and silicon carbide (SiC) chips for use on NVIDIA’s generation 800 V HVDC architecture.

These Navitas chips are built to handle high-performance computing for applications like AI data centers, energy storage, electric vehicles and mobile phones. What sets Navitas apart is that its chips apparently process data faster and more efficiently than its competitors, which is how they caught Nvidia’s attention.

On Monday, Navitas provided an update on its partnership with Nvidia, which sent the stock rocketing higher.

Transformational change

Essentially, Navitas reported that it is making progress on developing the semiconductors for Nvidia’s 800 VDC power architecture to power next-generation AI factory computing platforms.

“Traditional enterprise and cloud data centers, which rely on legacy 54 V in-rack power distribution, are unable to longer meet the multi-megawatt rack densities required by today’s accelerated computing platforms. These challenges call for a fundamental architectural shift,” Navitas officials said.

The Nvidia 800 VDC architecture, with the help of Navitas’ silicon chips, maximizes energy efficiency and improves overall system reliability.

As NVIDIA drives transformation in AI infrastructure, we’re proud to support this shift with advanced GaN and SiC power solutions that enable the efficiency, scalability, and reliability required by next-generation data centers,” Chris Allexandre, president and CEO of Navitas, said. “As the industry moves rapidly toward megawatt-scale AI computing platforms, the need for more efficient, scalable, and reliable power delivery becomes absolutely critical. The transition from legacy 54 V architectures to 800 VDC is not just evolutionary, it’s transformational.”

Huge potential

Investors see huge potential for Navitas as part of this transformational shift, riding alongside the AI juggernaut, Nvidia.

On the other hand, the release was simply a progress report from the May announcement, so there was nothing really new here.

The company reports earnings on November 3, so interested investors should tune in for more details. In the last quarter, Navitas only generated $15 million in revenue and had a net loss of $22 million, so it is still not profitable.

While the future seems bright, after this huge runup, investors should be cautious and do their due diligence on the next phase of growth.