This Wolf Isn't Dead Yet: Initiating Wolfspeed Stock With A Buy

2025-05-27 10:24:57 ET

Summary

• Wolfspeed, Inc. faces severe financial distress, with bankruptcy rumors and an 78% stock drop, but I believe the worst is priced in.
• Gallium nitride technology demand is surging, especially after Nvidia’s recent deal, positioning Wolfspeed’s tech for a potential turnaround.
• Despite debt and missed CHIPS Act funding, Wolfspeed’s low valuation and strategic assets make it an attractive acquisition target.
• I see a speculative opportunity here: if Wolfspeed secures a bailout or acquisition, the upside could be significant given current oversold levels.
• I hereon share my sentiment on Wolfspeed stock and why I see more upside in the near-term.

Investment Thesis

Wolfspeed, Inc. ( WOLF ) went through a rough patch last week and then skyrocketed quite a bit, and I'm here to say it's not too late to get in on the gains. At the start of last week, it was trading at just under $4, but on Tuesday, it took a 73% hit. Investors who picked up shares at $1.05 would've been well rewarded a day later when the stock recovered 77% on Friday. The reason for the selloff was that reports started circulating that the company was preparing to file for Chapter 11 bankruptcy. The bankruptcy report could be out in a couple of weeks....

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