Citrini Finds Upside for AI Power Player Wolfspeed
In its Q3 earnings call earlier this month, Wolfspeed reported a net loss of roughly $120 million on revenue of around $150 million.
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When it comes to data centers, all power flows through Wolfspeed. Literally.
Shares of the company soared more than 16% on Wednesday after a Citrini Research report argued that its silicon carbide “power semiconductors,” which control the voltage of power flowing through everything from AI data center servers to EVs, place it comfortably at the center of the ongoing AI infrastructure rollout. Yes, the same Citrini Research whose 2028 AI doomsday scenario spooked Wall Street earlier this year is now moving markets by finding a little daily upside in the AI boom.
The Next Chapter
The Citrini callout, part of a broader paywalled analysis of AI supply chain winners posted Tuesday, is a sign of Wolfspeed’s remarkable comeback. The company filed for Chapter 11 bankruptcy last June, after it failed to secure $750 million in government grants via the 2022 Chips Act that were contingent on the company successfully refinancing its debt load. In May of last year, Wolfspeed was the most shorted US stock by percentage of shares sold short, according to S&P Global Market Intelligence. But the firm exited Chapter 11 bankruptcy by September, having successfully reduced its debt by 70%.
Now, it has become one of the hottest stocks on the market, up more than 230% this year, and its past missteps seem to be the very thing setting it up for success:
- Last year, the company crumpled under its debt after aggressively expanding its production capacity before demand could catch up. But in 2026, the biggest AI firms can’t keep up with compute demand, and Wolfspeed’s efficiency-minded tech is looking more appealing than ever.
- In its report, Citrini called Wolfspeed “a crouching tiger getting ready to reveal a dragon that deserves to not just be priced based on what their fab’s replacement value theoretically is, but reflect the fact that it’s not going to be replaced,” adding that its “setup now, on the other side of bankruptcy, is perfect.”
Speed Trap: Still, Wall Street isn’t exactly basing its positions on current fundamentals. In its third-quarter earnings call earlier this month, Wolfspeed reported a net loss of roughly $120 million on revenue of about $150 million, down from about $185 million a year ago, and said it paid $52 million in interest. In other words, the turnaround is still very much in progress, though Citrini sees light at the end of the tunnel.
