Navitas Semiconductor falls 7.6% as Fed fears overshadow Nvidia deal

Navitas Semiconductor Corp.'s 800-volt power delivery board was featured by Nvidia at Computex 2026, confirming its gallium nitride technology for AI data centers — yet the stock still ended the week down 7.6 percent as Federal Reserve rate-hike fears swept growth stocks.

"The Nvidia collaboration confirms Navitas' technology in the highest-profile AI platform, but the macro environment is overwhelming stock-specific catalysts right now," said Keith Noonan, a Motley Fool analyst who covers the semiconductor sector.

The company reported first-quarter revenue of $8.6 million, an 18 percent sequential increase, with non-GAAP gross margins expanding to 39 percent. Second-quarter guidance of $10 million, plus or minus $500,000, points to continued momentum in high-power segments critical for AI infrastructure. The stock had surged more than 280 percent year-to-date before the weekly decline, driven by the Nvidia partnership and growing demand for gallium nitride-based power semiconductors that offer higher efficiency than traditional silicon solutions.

The selloff was triggered by the May jobs report, which showed 172,000 nonfarm payroll additions — more than double the 80,000 economists had estimated. Strong labor market data gives the Federal Reserve more room to raise interest rates, which typically compresses valuations for high-growth, pre-profitability companies like Navitas. The company continues to operate at a loss while investing heavily in production capacity, and its beta above 3.5 makes it one of the most volatile names in the semiconductor sector.

Nvidia Partnership Opens AI Infrastructure Door

Navitas' 800 V-to-6 V DC-DC power delivery board was showcased as part of Nvidia's AI Factory MGX platform at Computex, the Taipei-based trade show that has become a central venue for AI hardware announcements. The partnership positions Navitas alongside server mechanical engineering providers like Karrie International Holdings Ltd., which also demonstrated AI chassis and rack solutions at the event based on the Nvidia MGX architecture.

Gallium nitride semiconductors offer clear advantages in power conversion efficiency — a critical factor as AI data centers consume massive amounts of electricity. Navitas' technology targets the 800-volt direct-current infrastructure that hyperscale operators are deploying to reduce energy losses in high-density computing environments.

Valuation Debate Intensifies

Wall Street remains divided on Navitas despite the technology momentum. The consensus rating among eight to nine analysts tracked by aggregators is Hold, with an average 12-month price target of $12.88 to $14.46 — implying substantial downside from recent trading levels in the mid-to-high $20s. Price targets range from $8 to $21, reflecting deep uncertainty about the company's path to profitability.

The stock trades at a significant premium to larger semiconductor peers, leaving limited room for execution missteps. For growth-oriented investors, the Nvidia collaboration and improving gross margins provide tangible catalysts, but the elevated valuation and macro sensitivity make Navitas a high-risk bet on the AI power infrastructure theme.

This article is for informational purposes only and does not constitute investment advice.