Navitas Semiconductor Corporation (NVTS) Traded Lower as the Guidance Fell Short of Expectations

Soumya Eswaran

24 June 2024 at 8:48 am·3-min read

Meridian Funds, managed by ArrowMark Partners, released its “Meridian Contrarian Fund” first quarter 2024 investor letter. A copy of the same can be downloaded here. Strong economic signals and a positive inflation report lifted the market rally during the first quarter. The fund returned 6.25% during the quarter underperforming the 6.92% return of the Russell 2500 Index. However, the fund outperformed the 6.07% returns of the secondary benchmark the Russell 2500 Value Index. In addition, you can check the top 5 holdings of the fund to know its best picks in 2024.

Meridian Contrarian Fund highlighted stocks like Navitas Semiconductor Corporation (NASDAQ:NVTS) in the first quarter 2024 investor letter. Founded in 2013, Navitas Semiconductor Corporation (NASDAQ:NVTS) designs, develops, and markets gallium nitride power integrated circuits, silicon carbide, associated high-speed silicon system controllers, and digital isolators. The one-month return of Navitas Semiconductor Corporation (NASDAQ:NVTS) was 12.70%, and its shares lost 12.70% of their value over the last 52 weeks. On June 21, 2024, Navitas Semiconductor Corporation (NASDAQ:NVTS) stock closed at $4.17 per share with a market capitalization of $763.531 million.

Meridian Contrarian Fund stated the following regarding Navitas Semiconductor Corporation (NASDAQ:NVTS) in its first quarter 2024 investor letter:

"Navitas Semiconductor Corporation (NASDAQ:NVTS designs and produces highly efficient power semiconductors and is the leader in Gallium Nitride (GaN) technology, which enables superior energy efficiency and charging speeds over traditional silicon. This material is difficult to handle, and Navitas overcame significant technological hurdles to create a meaningful competitive advantage in what has a high potential to become a large and growing market. We originally invested in Navitas early in 2023 when the company was out of favor due to a mobile phone end-market downturn which slowed growth. We also detected market confusion over the acquisition of a Silicon Carbide-(SiC) based company. Navitas made this acquisition to broaden its product portfolio, but the market at the time viewed it as a possible signal that the company’s GaN technology was slow to gain traction. These concerns faded as Navitas grew revenues by over 100% in 2023 and the stock performed strongly. The stock declined in the quarter as revenue guidance came in lower than anticipated due to a slowdown in the EV market. While Navitas will continue to be subject to volatile end markets like mobile phones and EVs, we believe that each end market will have less effect over time as the company diversifies into new areas like data centers, appliances, and other markets. We continue to feel that Navitas has a large, untapped market opportunity and retains a significant technological advantage, and as such increased our position during the quarter."

Aerial view of a large solar panel array under construction in a rural China landscape.

Navitas Semiconductor Corporation (NASDAQ:NVTS) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 11 hedge fund portfolios held Navitas Semiconductor Corporation (NASDAQ:NVTS) at the end of the fourth quarter which was 18 in the previous quarter. While we acknowledge the potential of Navitas Semiconductor Corporation (NASDAQ:NVTS) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

We discussed Navitas Semiconductor Corporation (NASDAQ:NVTS) in another article and shared the list of best AI penny stocks to invest in. Baron Discovery Fund highlighted Navitas Semiconductor Corporation (NASDAQ:NVTS) in its first quarter 2024 investor letter. In addition, please check out our hedge fund investor letters Q1 2024 page for more investor letters from hedge funds and other leading investors.

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

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Navitas Semiconductor Corporation (NVTS) Traded Lower as the Guidance Fell Short of Expectations

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