Wolfspeed Stock Jumped 8% — Time to Buy?

Let's talk about… Silicon carbide Wolfspeed? Okay, so I built a custom supply chain and it's not finished. We're gonna have a couple more features ready for this when it launches September 4th, next weekend. One thing that we'll be able to add to this is add the same company to multiple parts in the supply chain. Because I have Wolfspeed listed here under silicon carbide wafers, specifically raw silicon carbide wafers, but they also do epitaxial wafers. They also do the epi step using CVD, chemical vapor deposition. They also make devices. They're here in the middle in the silicon carbide devices with the IDMs. But what about Wolfspeed's recovery? I just clicked on the financials for Wolfspeed. It pops up here on this little panel on the right. This is the last 12 months. Another feature we're gonna have at launch is a toggle switch between last 12 months and quarterly revenue. You can also just click on Wolfspeed and go to the financials page directly from the supply chain. But, we'll have that here. And yeah, this is the last 12 months. Revenue has continued to decline. They guided for sequentially flat revenue for the next quarter, that ends in Q3 of the calendar year, end of September. But look at these margins. This is just terrible. You're bleeding cash. They reworked the balance sheet. They were able to settle with creditors, with Apollo and Renesas and others. But, priority number one, if all this other stuff is going to get fixed for Wolfspeed, they need to return to revenue growth first and foremost, especially when you have some of the other integrated IDMs like STMicro, Onsemi, Infineon are vertically integrated as well. They also manufacture and develop their own silicon carbide wafers. They dice those up and make them into silicon carbide parts and pieces for everything from solar inverter systems to electric cars and hybrid cars to now coming up especially in 2027, 800-volt data center architecture power systems. And look at the comparison. Even Onsemi, which has kind of lagged behind the pack on some of these, revenue growth has already stabilized and returned to year-over-year growth in the last quarter. Gross margin needs improvement, but they're close to that magic 40% figure. Operating margin is positive, free cash flow is positive. That's the comp. Personally for us, unless Wolfspeed got really, really cheap, which it appears it is. Where are we at today? Let me click on Wolfspeed. Market cap of 1.4 billion. Wow, it's up a lot today, 8%, quite the rebound. There's gonna be these news items as well, press releases from the companies. We'll also have some new features that'll launch later in September, probably like a daily AI roundup of some sort. At any rate, that's where Wolfspeed's at. Let me go back to the custom supply chain here. Unless Wolfspeed gets really, really cheap, starts trading for less than two times annualized sales, at which point, okay, maybe we take a starter position or a speculative position, maybe even buy a long-dated out-of-the-money call option, something like that that doesn't eat up very much of the portfolio at all, but could capture some upside if things suddenly turned around. Until that happens, some of these other vertically integrated companies, STMicro, has really started to turn things around. Revenue is growing again. Infineon, which is pretty broadly diversified. But they're in pretty decent shape, at least from a profitability standpoint doing pretty well. Of course, if we're looking at more pure plays in power, semiconductors, fabless, Monolithic Power is really fantastic. You get really, really high revenue growth and above average profit margins. If we're looking to allocate serious amounts of money beyond just a speculative bet, that's where we're personally starting. And a more speculative bet like Wolfspeed, if it got cheap enough, that would tempt us back in. But there's no sign of imminent recovery yet. Stuff is happening in 2027. I think the market has gone back to sleep on high voltage data center potential from Nvidia after the big sell-offs in July and earlier this month.