Navitas Semiconductor (NVTS) built its 2026 comeback around AI data centers, and those who bought into its business are now watching it fight a major legal battle.
NVTS shares had climbed sharply this year because of the company’s shift into high-power chips for AI server racks.
However, things took a sharp turn when Wolfspeed (WOLF), the company that pioneered silicon carbide power chips, sued Navitas on July 7.
Wolfspeed said five of its patents cover the technology in nearly every major Navitas product line.
Navitas shares fell as much as 8.59% over the five trading sessions that followed, closing at$13.47 on Friday.
For a company just beginning to prove itself in AI data centers, the lawsuit threatens the products doing most of the proving.
Wolfspeed’s lawsuit takes aim at nearly all of Navitas’ chips
Wolfspeed filed the complaint in the U.S. District Court for the District of Delaware on July 7.
The lawsuit alleges that five of Wolfspeed’s gallium nitride and silicon carbide patents are infringed by Navitas’ core product lines.
We respect the IP rights of others, and we expect the same respect in return.
Navitas said that the lawsuit covers its GaNFast, GaNSlim, and GaNSafe transistors. It also covers its GeneSiC MOSFETs and SiCPAK power modules, according to a press release,
Those five families make up most of what the company sells.
Wolfspeed wants more than money. It is seeking a permanent U.S. sales and import ban on the accused products, along with damages and licensing fees, TrendForce reported.
Navitas shares were already down sharply in premarket trading within hours of the filing, Benzinga noted.
Navitas calls the lawsuit baseless as its AI pivot meets a cash test
Navitas disputes the claims and says it will fight the suit, calling the litigation baseless in its own statement.
CEO Chris Allexandre has said the company’s shift toward high-power markets remains on track, according to Investing.com.
Navitas’ first-quarter revenue came in at $8.6 million, up 18% from the prior quarter but down from $14 million a year earlier, an SEC filing shows.
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The company is pulling back from mobile chargers and leaning into AI data centers.
High-power markets grew about 35% year over year, Navitas‘ investor relations release shows.
Cash is tighter than the growth numbers suggest. Revenue over the past year fell about 45% to $45.92 million, and margins stayed deeply negative, MarketBeat reported.
Insiders sold roughly $116 million in Navitas shares in late May, weeks before the suit landed.
What Wall Street’s price targets mean for Navitas stock now
Navitas shares still trade well above where they started 2026, even after this week’s slide.
The average analyst price target sits at $16.93, above Friday’s $13.47 close and far below where the stock traded as recently as May.
Wolfspeed isn’t negotiating from strength either. According to Yahoo Finance, WOLF posted a 19% revenue decline last quarter and carries more than $1.7 billion in debt.
That’s a big reason why analysts expect a licensing settlement rather than a fight to the finish.
4 things to watch in the Wolfspeed-Navitas patent fight
- Whether a judge grants Wolfspeed’s request for a preliminary sales injunction, which would matter more than the damages claim itself
- Navitas’ second-quarter results on July 27, and any update on legal costs or customer commitments
- Whether Navitas can redesign its chips to route around the five disputed patents, an option its manufacturing model allows
- Signs of a licensing settlement, the outcome analysts consider most likely in comparable semiconductor patent disputes
Navitas keeps shipping chips, and Wolfspeed keeps building outside partnerships while the case moves forward. Investors don’t need to predict the verdict to have a plan.
Watching how the court handles Wolfspeed’s injunction request, expected in the coming weeks, will say more about Navitas’ near-term risk than any earnings report.
Related: Fresh lawsuit drops bombshell on Micron stock price
