Wolfspeed Stock Surges 25% Premarket After Soaring 53% in the Previous Trading Day

Wolfspeed Inc. rose 25% in premarket trading on Monday after soaring 53% in the previous trading day.

Wolfspeed, a leader in wide bandgap semiconductor technology, plays a crucial role in enabling more efficient power electronics and radio frequency devices. Its products are essential in industries such as electric vehicles, 5G infrastructure, and renewable energy.

What’s Behind Wolfspeed’s Momentum?

The company’s stock movement today reflects growing demand for advanced semiconductor materials that support higher power efficiency and performance. Wolfspeed’s focus on silicon carbide (SiC) and gallium nitride (GaN) materials aligns with trends toward electrification and faster communications.

Wolfspeed shares surged as the company’s bankruptcy filing is part of a planned, creditor-supported restructuring aimed at significantly reducing its debt and lowering annual interest costs. Investors view this move as a financial reset rather than a collapse. With strong support from senior secured noteholders, Wolfspeed intends to emerge from bankruptcy later this year with a healthier balance sheet and substantial cash reserves to support its operations.

Expansion of manufacturing capabilities and strategic partnerships with automotive and industrial companies highlight Wolfspeed’s efforts to scale its technology adoption.

Market interest also ties into the broader semiconductor supply chain dynamics and government initiatives aimed at strengthening domestic chip production.

Is It Too Late Already to Buy WOLF Shares?

Yes – Wolfspeed shares are far from attractive following a 53% rally on Thursday.

Despite the restructuring, the semiconductor stock remains a highly speculative bet. Wolfspeed has burned through cash for years, losing an alarming $1.1 billion over the past 12 months with negative operating margins exceeding 60%.

Even after slashing debt, equity holders face massive dilution – receiving between 3% and 5% of the reorganized company only.

Plus, WOLF’s revenue continues to miss expectations, and it lags rivals like STMicroelectronics (STM) in both execution and scale. All in all, a Chapter 11 filing may buy time, but it’s not a comprehensive fix to what’s wrong with WOLF stock.