Wolfspeed, Inc. (NYSE:WOLF) shares closed 9.4% lower at $26.35 on August 20 following its fiscal fourth-quarter results. Revenue reached $149.6 million, while the company reported a $145.4 million GAAP net loss and a $62.4 million company-defined adjusted EBITDA loss.
Wolfspeed, Inc. (NYSE:WOLF) said AI data center revenue more than doubled in fiscal 2026 compared with fiscal 2025 and increased approximately 20% sequentially in the fourth quarter. The company did not disclose the category’s dollar contribution. Total revenue remained near $150 million for a second consecutive quarter, showing that AI growth has not yet lifted consolidated sales.
Bull Case
Wolfspeed, Inc. (NYSE:WOLF) has a credible opportunity to expand beyond electric vehicles. Silicon carbide can improve power density and efficiency in high-voltage data center systems as rising AI workloads place greater demands on electrical infrastructure.
Wolfspeed, Inc. (NYSE:WOLF) launched a dedicated data center solutions team, introduced its fifth-generation silicon carbide MOSFET and partnered with LITEON on 800-volt direct-current power platforms. These initiatives could become material if design activity converts into high-volume orders.
Wolfspeed, Inc. (NYSE:WOLF) ended June with $1.09 billion of cash, cash equivalents and short-term investments. Company-defined non-GAAP free cash flow was negative $60.9 million, calculated as operating cash flow less net property-and-equipment and patent spending. The measure excludes mandatory debt-service payments.
The 2025 restructuring reduced debt by approximately 70% and annual cash interest expense by roughly 60%, extending the company’s financial runway.
Bear Case
Wolfspeed, Inc. (NYSE:WOLF) still has a manufacturing-economics problem. GAAP gross margin was negative 25%, while non-GAAP gross margin was negative 20%. The non-GAAP calculation excluded $2 million of stock-based compensation and $5 million of restructuring and facility-closure costs.
Company-defined adjusted EBITDA was negative $62.4 million versus negative $40.7 million in the prior-year quarter, although Wolfspeed, Inc. (NYSE:WOLF) says its post-emergence Successor results are not comparable with Predecessor periods. First-quarter fiscal 2027 guidance calls for revenue of $140 million to $160 million, with non-GAAP gross margin expected to remain negative.
Wolfspeed, Inc. (NYSE:WOLF) also faces continuing dilution risk. The company had approximately 53.0 million common shares outstanding as of August 13. As of June 28, it had reserved approximately 58.7 million shares for potential issuance under convertible notes and warrants, plus approximately 12.1 million shares for outstanding and future equity awards. Holders also converted $46 million of notes into equity during the fourth quarter.
Insider Monkey’s Hedge Fund Data
Insider Monkey’s hedge fund database shows that 31 hedge fund portfolios held positions in Wolfspeed, Inc. (NYSE:WOLF) at the end of the first quarter, compared with 25 portfolios at the end of the preceding quarter. These figures reflect holdings as of March 31 and do not capture subsequent trades or reactions to the latest results.
Conclusion
Wolfspeed, Inc. (NYSE:WOLF) has established genuine AI data center momentum, but that business remains too small to overcome negative margins, losses and dilution risk. The stock remains highly speculative until rising utilization produces visible and sustained gross-margin recovery.
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Disclosure: None. This article is originally published at Insider Monkey.
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