This Semiconductor Stock Soared 26% Tuesday After Launching Devices for Nvidia's AI Factory Architecture

Navitas Semiconductor (Nasdaq:NVTS) shares jumped 26% on Tuesday to $12.57 (£9.41) per share after it launched new high-performance power semiconductor devices to support Nvidia's (NVDA) newly announced next-gen AI factory architecture. The Navitas stock is up 252% year-to-date.

The California-based semiconductor manufacturer unveiled advanced gallium nitride (GaN) and silicon carbide (SiC) power semiconductors, specifically built for Nvidia's 800 VDC AI factory power architecture. The 800 VDC power distribution system offers better efficiency and is designed to deliver megawatt-scale rack power for AI data centres.

Navitas' new products include 100-volt GaN field-effect transistors (FET), 650-volt GaN devices, and high-voltage SiC components, all designed to improve power delivery and intensity for large-scale AI and high-performance computing (HPC) systems.

The development is part of broad efforts to transition away from the traditional 54V power distribution systems, which can no longer handle the multi-megawatt rack density requirements of new-age AI data centres.

Navitas' latest 800 VDC power distribution system minimises resistive losses and copper usage. Navitas CEO Chris Allexandre stated that the shift to 800 VDA from 54V is transformational rather than evolutionary. The company is now prioritising megawatt-scale demands of AI factories and smart energy infrastructure.

'As Nvidia drives transformation in AI infrastructure, we're proud to support this shift with advanced GaN and SiC power solutions that enable the efficiency, scalability, and reliability required by next-generation data centres,' Allexandre said in a press release.

According to the company, the 800 VDC power distribution allows direct conversion from utility power to 800 VDC within data centres, eradicating the need for multiple traditional conversion stages. This mechanism significantly enhances system reliability.

The 100V GaN FET portfolio for lower-voltage DC-DC stages on GPU power boards is fabricated using a 200mm GaN-on-Si process in partnership with Power Chip. Meanwhile, the 650V GaN products and high-voltage SiC MOSFETs support various stages of power conversion in data centre infrastructure.

Overall, the new technologies cover both high-voltage distribution and point-of-load conversion for platforms like Nvidia's Rubin Ultra. Allexandre said that the project was advancing and emphasised the advantages of using alternatives to silicon.

Navitas is gradually shifting its focus to AI data centres amid the rising power requirements of AI processors. Navitas had also stated that power demand for AI could grow from 7 gigawatts in 2023 to over 70 gigawatts by 2030, presenting a big opportunity for the company to capitalise on this transition and drive long-term growth.

The semiconductor stock's outperformance in recent months raises the question of whether Navitas still has more room to run. The company faces near-term challenges like tariffs and high valuation. Furthermore, Wall Street analysts view most of the upside linked to the Nvidia partnership as already priced into the Navitas stock. The consensus rating on Navitas is a 'moderate buy,' but the mean stock price target of $6.24 (£4.67) implies a potential downside of over 50% from current trading levels.

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