Wolfspeed Inc/DE (WOLF) Stock Forecast & Price Target

Wolfspeed Inc is experiencing a positive trajectory, with first-quarter revenues of $49 million in F1Q25, marking a significant increase from $41 million in F4Q24 and $4 million in F1Q24, despite being slightly below the previous guidance due to customer push-outs. The company's gross margin, although low at 3.4% in the first quarter, reflects the ramp-up of its manufacturing facility, with plans for significant cost savings of $200 million targeted through restructuring efforts, of which 70% will come from operating expenses. As Wolfspeed continues to lead in silicon carbide technology and maintains a dominant position in materials, its strategic importance in the semiconductor space remains strong, bolstered by expectations of additional revenue from asset sales and ongoing growth in device revenue.

Wolfspeed Inc. is facing significant challenges in its end demand environment, particularly within the electric vehicle sector, which has been compounded by inventory build-ups in the industrial and energy markets, adversely affecting gross margins. The company's adjusted gross margins have shown weakness, with forecasts indicating a further decline to negative levels, specifically projected at -5% for the March quarter. Additionally, management has reduced capital expenditure guidance for 2025 by $100 million, highlighting caution amid a struggling revenue landscape and increased technology risks.