Wolfspeed stock soars on record fiscal Q1 revenue, growth
Shares of American chipmaker Wolfspeed (WOLF) are skyrocketing Tuesday morning after reporting fiscal first-quarter earnings for 2024, citing four percent year-over-year growth. Yahoo Finance Live observes Wolfspeed's stock action and Wall Street commentary on the semiconductor manufacturer's outlook.
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Video Transcript
BRAD SMITH: Wolfspeed, taking a look at shares of the manufacturer. The wide bandgap semiconductors, yeah, try saying that 15 times fast, they're up by about 19%, ripping to the upside, speeding to the upside. We'll figure out. We'll workshop it.
SEANA SMITH: Wolfspeed.
BRAD SMITH: But ultimately here, all around, looking at September quarter EPS and December quarter guidance here, the upbeat forecast suggests that Wolfspeed is on track to meet its production targets at its Mohawk Valley plant in New York, which the company has been hoping to bolster its results after many delays here over the past month. Not a great story for the stock. It's down, and over the past three months even worse, down by about 49%.
SEANA SMITH: Well, it's definitely off to the races today, so we'll see how far it runs through the balance of the day. Analysts reacting pretty well to its results. Now, for people who aren't familiar, Wolfspeed makes those silicon carbide chips. Those are used to-- they extend the range of EVs, electric vehicles. TD Cowen put out another note. They were busy last night, 10:00 PMish.
They consider it a small step in the right direction in terms of Wolfspeed, so to your point about how the stock has performed this year. They see it as welcome signs of progress. Momentum will take multiple quarters. They like their ability to kind of ramp up its wafer capacity to service its MVF facility. They say that's a critical hurdle to the company, so, you know, you've got some cautious optimism there out of TD Cowen.
Oppenheimer also out with a note on Wolf, saying that it was a solid quarter. There is still some execution risk with regard to how Wolf performs. They also highlighted the MVP, the Mohawk Valley Ramp, contributing about $4 million in revenue to the quarter, so that was a pullout that Oppenheimer and TD Cowen saw with regard to Wolfspeed, so-- but the stock is certainly performing very well today in that space.
BRAD SMITH: One thing that investors should be paying attention to here as well is the market opportunity. The company talked about this in the report, saying that the market opportunity for silicon carbide stands at $6 billion today. That's up from $400 million just five years ago, so some kind of rough of the-- rough kind of back of the notebook math here, that's about 15x here.
Now, think about where that is right now to where they position or where they believe that that's going to get to, they believe that this is the only pure play silicon carbide company in the market today, Wolfspeed, and they believe that they're best positioned to capitalize on a tailwind that represents a potential $20 billion addressable market by 2020. By 2030, excuse me. And so with that potential move higher in the TAM, in the total addressable market, positioning themselves to kind of stave off any competition, that would prove as a potential tailwind for this company moving forward as well.
