Navitas shares fall about 15% as AI chip selloff widens
Key Facts
Navitas Semiconductor shares fell about 15% on November 5, 2026, as chip stocks extended losses after the US midterm elections, according to a TIKR report republished by Yahoo Finance. The drop came in the session after the stock rose following its third-quarter results and an upgrade from Rosenblatt, the report said. The stock closed at $7.86 on November 5, compared with $9.33 at the previous session’s close, according to EL7 data. The decline spread to the broader market, with the Philadelphia Semiconductor Index losing 12.2% in the same session. That was the index’s biggest one-day drop since April 2025, according to Reuters.
The decline coincided with a broad selloff on Wall Street. The S&P 500 fell 4.4%, and the Nasdaq Composite dropped 5.5% on November 5, according to the Associated Press. The agency said AI stocks came under pressure as concerns grew over a possible pause or restrictions on data centers after Democratic victories in the midterm elections. Investor concerns had surfaced in the previous session: Reuters reported that Democrats’ victories in winning control of both the Senate and the House had raised concerns about tighter AI regulation. The report also cited wins by candidates who opposed data center expansion and called, in part, for a halt to new projects in Texas and Georgia, adding to doubts about infrastructure spending.
Stock moves reflected concern about the impact of policy and results on market sentiment, alongside investor bets that spending on AI infrastructure would continue. Mark Hackett, a strategist at Nationwide, said, "Disappointing results and concerns that Democratic control could slow AI expansion are weighing on sentiment." He added that reactions are sharp when market sentiment shifts, according to Reuters. In the same session, about $2 trillion in Nasdaq market value was erased, according to a Reuters report. The report said the index entered correction territory after falling from the record closing high it reached a month earlier, while the AP said Thursday’s losses exceeded the gains in the previous session, which had been the market’s best in three months.
The selloff came despite an improvement in Navitas’s third-quarter revenue. The company reported revenue of $14.0 million, compared with $10.5 million in the second quarter and $10.1 million in the third quarter of 2025, according to its filing with the US Securities and Exchange Commission. It said this marked its first year-over-year growth since 2024. GAAP gross margin rose to 21.5% from 0.4% in the second quarter, while non-GAAP gross margin was 40.0%, versus 39.5%. High-power markets’ contribution grew more than 50% quarter over quarter, according to the chief financial officer. But the GAAP operating loss widened to $34.4 million from $27.2 million, while the non-GAAP operating loss narrowed to $10.9 million from $11.4 million.
The company posted a GAAP net loss of about $37.1 million in the third quarter, compared with a loss of $228.2 million in the second quarter, which included a $203.1 million non-cash charge to remeasure earn-out liabilities. Cash and cash equivalents also rose to $531.5 million on September 30, 2026, from $236.9 million on December 31, 2025, according to the filing. Navitas expects fourth-quarter revenue of $16.0 million, plus or minus $0.5 million. At the midpoint, that would represent quarter-over-quarter growth of 14% and year-over-year growth of 119%. The company said AI data centers, grid infrastructure and power could account for more than 40% of total sales by the end of 2026, with momentum continuing through 2027. The company also expects 125% growth in high-power markets revenue in 2026 and about a threefold increase in AI infrastructure business revenue in 2027.