Wolfspeed (WOLF) stock plunged about 18% in Thursday’s pre-market trading as the supplier of silicon carbide semiconductors used in electric vehicles (EVs) and renewable energy equipment missed Wall Street’s revenue estimates for the first quarter of Fiscal 2026 (ended September 28, 2025) and issued a weak outlook. The results highlighted the challenges Wolfspeed faces as it emerges from bankruptcy amid lackluster demand.
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Wolfspeed Delivers Mixed Q1 FY26 Results
Wolfspeed reported a 1.1% rise in its Q1 FY26 revenue to $196.8 million, but missed the consensus estimate of $198 million.
Meanwhile, the company reported an adjusted loss per share of $0.55 for Q1 FY26, marking an improvement from the loss per share of $0.91 in the prior-year quarter. Moreover, the bottom line was better than the Street’s expectation of an adjusted loss per share of $0.71. However, WOLF’s Q1 FY26 adjusted gross margin contracted significantly to -26% from 3% in the prior-year quarter. The company reported a rise in underutilization costs related to its Mohawk Valley and Siler City facilities to $47 million from $26 million in Q1 FY25.
CEO Robert Feurle stated that the company is aligning its business with near-term challenges while advancing into new, high-growth applications such as artificial intelligence (AI) data centers, aerospace, and energy storage.
WOLF Issues Weak Q2 Guidance
Looking ahead, Wolfspeed expects a sequential decline in revenue, with Q2 FY26 top line projected in the range of $150 million to $190 million.
The company explained that the sequential decline in Q2 FY26 revenue is expected due to accelerated customer purchases in the fiscal first quarter, as some customers built up inventory by placing orders from the Durham fab prior to its planned closure at year-end. Wolfspeed added that some customers pursued “second-sourcing of products during the pendency of its bankruptcy process.”
Moreover, Wolfspeed is facing softness in the market, which it expects to continue through Fiscal 2026. It is seeing slow orders from automakers and increasing competition from larger rivals, such as STMicroelectronics (STM) and Infineon (IFNNF). The company stated that it plans to provide a comprehensive financial update in the first half of calendar year 2026. Wolfspeed clarified that it will not be updating its long-term model or guidance before then.
Is Wolfspeed Stock a Buy, Hold, or Sell?
Wolfspeed filed for Chapter 11 protection in June and emerged from bankruptcy in September after reducing its debt by about 70%.
Currently, Wolfspeed carries a Hold rating from Susquehanna analyst Christopher Rolland. His price target of $30 indicates a 6.2% downside risk from current levels. However, this rating/price target might change in reaction to the Q1 FY26 results and outlook.
