Navitas Q2 Call: AI Story Intact, But Revenue Gap Widens

What happened

Navitas Semiconductor's Q2 earnings call emphasized its strategic shift toward AI data-center power, with high-power markets becoming a majority of revenue and the Navitas 2.0 restructuring advancing. However, actual results tell a tougher story: Q2 revenue of $10.5 million was down 28% year-over-year, and net loss ballooned to $228.2 million, reflecting the collapse of mobile sales before new AI programs scale. While management guided for modest sequential growth in Q3, the timeline for meaningful AI production revenue extends into 2027, leaving a precarious bridge period funded by aggressive share dilution. Concurrently, new patent and trade-secret lawsuits from Wolfspeed and Renesas cast a shadow over the very products at the heart of the AI growth narrative. With the stock still pricing in AI success before it becomes auditable, the setup remains a high-risk wait for evidence of conversion.

Implication

Navitas's Q2 call confirmed that while the strategic pivot to AI power is conceptually sound, the financial bridge to that future remains deeply strained—revenue is still declining year-over-year, losses are massive, and the company continues to fund operations through heavy equity dilution. The new litigation overhang adds legal risk to the same GaN and SiC products that underpin the AI thesis, which could derail customer qualification timelines. Until we see disclosed production orders or revenue directly tied to 800V AI rack programs, the stock's valuation—still above $2.6 billion on just $10.5 million of quarterly sales—has no margin of safety. Prudent investors should watch for Q3 revenue above $14 million and specific AI customer announcements before considering a position, and exit if legal injunctions materialize.

Thesis delta

No shift — the earnings call reinforces the existing WAIT thesis. The AI infrastructure story remains unchanged but unproven, while Q2 financials confirmed the revenue gap, heavy losses, and litigation risks that justify caution.