Should Investors Buy the Dip in Wolfspeed's Stock?

2026-02-09 20:20:00 ET

Coming out of bankruptcy, Wolfspeed (NYSE: WOLF) was expected to offer investors a way to play the silicon carbide market without the shackles of its overly burdensome debt. However, the company's fiscal second-quarter earnings report showed that many of the problems that plagued the company and led to its bankruptcy still exist.

Two of Wolfspeed's biggest issues before bankruptcy were negative gross margins and operating cash flow . And those two issues continued to be a problem when the company reported its fiscal Q2 2026 results.

For the quarter, which ended Dec. 28, 2025, Wolfspeed recorded a negative gross margin of 46%, hurt by costs from inventory reserves and fresh start accounting, as well as the continued underutilization of its manufacturing facility. It expects its gross margin to remain negative in fiscal Q3 2026 as it continues to deal with operational issues.

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