WOLF - Why Wolfspeed Skyrocketed Today
2023-07-05 16:20:36 ET
Shares of Wolfspeed (NYSE: WOLF) rocketed upward by 11% on Wednesday. The chipmaker is making an enormous and costly bet on plants to make silicon carbide (SiC), an alloy that has tremendous conductive and heat-resistant capabilities. Because of these characteristics, silicon carbide is expected to be heavily used in electric vehicles and infrastructure, and is therefore primed for blockbuster growth this decade.
Wolfspeed is not currently profitable, which has particularly weighed on investor sentiment about the company in this era of higher interest rates. That anxiety has led to a year-to-date share price decline of 17.8% even as the broader semiconductor sector has surged.
But Wolfspeed just delivered some positive news: It inked a long-term sales agreement that may de-risk the company's ongoing investments.
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Why Wolfspeed Skyrocketed Today