Jim Cramer on Enovix: “We’re Not Going to Buy That Stock”

Enovix Corporation (NASDAQ:ENVX) is one of the stocks that Jim Cramer shared thoughts on. During the lightning round, a caller inquired after Cramer’s thoughts on the company, and he stated:

“We have a glut of oil. I’m worried about that. ENVX is another stock that’s just up way too much. I mean, we gotta find some stocks that are not up like a straight shooter, because what happens, these are what I call parabolic buys. And if you buy a parabolic stock, what happens is it goes parabolic down. So, therefore, we’re not going to buy that stock.”

A close-up of a battery cell being assembled with intricate precision.

Enovix (NASDAQ:ENVX) designs and produces advanced lithium-ion battery cells for use in wearables, smartphones, computing devices, electric vehicles, and other applications. Massif Capital stated the following regarding Enovix Corporation (NASDAQ:ENVX) in its Q4 2024 investor letter:

“Our most volatile position remains Enovix Corporation (NASDAQ:ENVX), and we admit to being miffed by its continued volatility. At one point, it made sense as it was a story stock, but at this point, the stock has advanced well beyond being a story. Despite the progress the firm is making operationally, the stock has historically annualized volatility over rolling 100-day periods of nearly 100%. Last year, the stock moved more than 30% from local lows to local highs four times; it also had drawn downs from local highs to local lows of more than 35% three times. The short interest in the stock also remains incredibly high at more than 30% of the stock’s float.

This strange trading behavior and short interest are occurring against a strong operational backdrop. The firm completed site acceptance testing for its high-volume production line at its Fab-2 site in December, positioning the company well for mass production of batteries starting in 2025/2026. The management team also continues to advance the sale pipeline, announcing, in December, a prepaid purchase order from a “Silicon Valley-based global technology leader” for a battery solution for the buying firm’s mixed reality wearables. The deliveries for this order will be small in 2025 and ramp in 2026, but it’s unclear, especially given the market for mixed reality wearables (total TAM assuming battery ASP of $5/unit is $175 million), that they will be all that significant. Nevertheless, this order is yet another indicator that this is no longer a company with a science experiment and a story but instead a battery manufacturer…” (Click here to read the full text)

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Disclosure: None. This article is originally published at Insider Monkey.