Wolfspeed continues to navigate turbulent waters, with its latest financial disclosures and forward guidance creating substantial unease among market participants. The semiconductor firm, which recently emerged from bankruptcy protection, finds investor confidence severely tested by operational challenges and a pessimistic outlook.
Major Shareholder Activity Highlights Market Uncertainty
The prevailing uncertainty surrounding Wolfspeed’s trajectory is perhaps best illustrated by recent actions from a key institutional holder. Citigroup, a major shareholder, executed nearly offsetting transactions, purchasing 194,305 shares while simultaneously selling 194,423 shares. These contradictory moves by a significant market player underscore the deep division and lack of clear direction regarding the company’s stock performance. The market remains decidedly directionless as it searches for catalysts.
Quarterly Performance Reveals Significant Operational Strain
For the first quarter of 2026, Wolfspeed reported revenue of approximately $197 million. This performance was severely undermined by a substantial GAAP loss of $4.12 per share. A critical point of concern was the company’s adjusted gross margin, which collapsed to a deeply negative 26%. A primary driver of this poor margin performance was $47 million in costs related to underutilized manufacturing capacity. While the company maintains a solid cash position of $926 million, these operational metrics present a troubling picture to the investment community.
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Guidance Shock Compounds Existing Woes
Perhaps the most damaging blow to investor sentiment came from management’s forecast for the current quarter. Executives project revenue will plummet to a range of just $150 to $190 million, a figure that falls significantly below analyst expectations. Company leadership attributed this anticipated decline to several key factors:
- Preemptive Inventory Buildup: Customers accumulated significant stockpiles ahead of the planned closure of the Durham fabrication plant.
- Supply Chain Diversification: Clients actively sought secondary suppliers during Wolfspeed’s bankruptcy proceedings.
- Persistent Market Weakness: A continued sector-wide slump is expected to pressure results throughout the entire 2026 fiscal year.
This gloomy outlook raises fundamental questions about the company’s ability to execute a successful turnaround in the face of such pronounced headwinds.
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