WOLF Stock Drops 11% After Earnings Miss — Wolfspeed’s AI Growth Fails To Offset Negative Margins

The silicon carbide maker reported a wider-than-expected loss and expects next-quarter sales to remain broadly flat at $140 million to $160 million.

• Wolfspeed reported an adjusted loss of $2.26 per share, wider than the $1.47 loss analysts expected.
• Quarterly revenue fell 24% year-over-year to $149.6 million, narrowly missing Wall Street’s $150 million estimate.
• Stocktwits retail sentiment improved to ‘bullish,’ though traders remain divided over the company’s negative margins, cash burn and around $1.69 billion in debt and convertible obligations.

Shares of Wolfspeed Inc. (WOLF) fell around 11% in after-hours trading on Wednesday after the company reported earnings and revenue misses in its fiscal fourth-quarter results. Revenue of the silicon carbide wafers and power chips maker fell 24.06% year-over-year, while the company said AI data-center sales increased 20% in the fourth quarter from the prior quarter and doubled for the full fiscal year.

WOLF Reports Wider-Than-Expected Loss

The company reported an adjusted loss of $2.26 per share, compared with a consensus estimate of a $1.47-per-share loss, according to Fiscal.ai. Revenue stood at $149.6 million, slightly below Wall Street’s $150-million estimate.

“We continued to expand our device business, highlighted by strong growth in AI data center applications and the launch of our fifth-generation SiC MOSFET. These achievements strengthen our technology leadership and confidence in our long-term growth opportunities,” Wolfspeed CEO Robert Feurle said.

“We are aggressively targeting initiatives to further reduce our debt and cost of capital as well as enhance our financial positioning,” Wolfspeed CFO Gregor van Issum said.

Wolfspeed Expects Negative Gross Margin

Looking ahead, Wolfspeed projects flat sales of between $140 million and $160 million in the next quarter, with non-GAAP gross margin expected to remain negative.

WOLF Stock: Stocktwits Retail Sentiment

On Stocktwits, retail sentiment for WOLF improved to ‘bullish’ from ‘neutral’ in the past 24 hours, while message volume was ‘high.’

One retail trader remained bearish on Wolfspeed, citing its 24% year-over-year revenue decline, negative gross margins, $145 million quarterly loss, and $54 million operating cash burn. The trader said AI data-center growth and new chip technology do not offset Wolfspeed’s negative margins and around $1.69 billion in debt and convertible obligations. The trader added that a turnaround would need to show positive gross margins, lower cash burn and meaningful debt reduction.

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Another retail trader called WOLF a “long-term play,” adding that the stock is “very volatile” and that they expect “a deep correction before picking up,” while remaining bullish.

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WOLF stock has gained nearly 68% year-to-date.

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