Wolfspeed Shares Plunge Amid Weak Revenue Guidance

Wolfspeed's stock tumbles 25.8% following Q3 results and weak 2026 revenue forecast, disappointing Wall Street expectations.

Date: 10-05-2025

AI Rating: 4

Wolfspeed's recent performance and guidance indicate significant challenges ahead, particularly concerning its revenue growth and earnings per share (EPS). The company reported Q3 2025 revenue of $185.4 million, slightly below expectations of $185.9 million. This revenue miss may signal difficulty in achieving anticipated growth rates, which is typically concerning for investors.

The company's net loss of $0.72 per share, while better than the expected loss of $0.82, still highlights ongoing profitability issues. The combination of a revenue miss and a substantial downward revision of the 2026 revenue forecast—estimating $850 million versus the expected $958.7 million—raises questions regarding Wolfspeed's growth trajectory in such a critical market as electric vehicles (EVs).

**Weak Guidance and its Implications**: The guidance provided by Wolfspeed, particularly related to its silicon carbide chips, has caused investor panic. The downward adjustment in revenue forecast stems largely from slower adoption in the EV sector and external economic pressures, including tariffs from the previous administration that threaten the profitability of American chipmakers.

Uncertainty surrounding capital access also exacerbates the situation; reliance on federal funding under the CHIPS Act is now in jeopardy, which could further impact the company's operating capacity. With a reliance on chip sales in a competitive industry, the inability to secure necessary funding may hinder Wolfspeed's ability to innovate and expand.

Given these factors, investors should critically evaluate the inherent risks in Wolfspeed's stock. While there is potential in the underlying technology, the operational challenges and weakened forecast could deter potential investors.

Stocks: WOLF