Key Highlights

• WOLF shares fell approximately 13.10 percent to $25.28 intraday, down from a prior close of $29.09.

• Fiscal fourth quarter Revenue fell 24 percent year over year to $149.6 million, with a much wider than expected non-GAAP EPS loss.

• AI Data Center device revenue rose 20 percent sequentially and more than doubled year over year, a bright spot in an otherwise weak quarter.

• First-quarter fiscal 2027 guidance of $140 million to $160 million signals no near-term Margin inflection, with non-GAAP gross margin expected to remain negative.

Wider Loss Drives the Selloff

Wolfspeed, Inc. (NYSE:WOLF) shares tumbled approximately 13.10 percent to $25.28 intraday, down from a prior close of $29.09, as investors reacted to a much wider than expected fiscal fourth quarter loss and a 24 percent year-over-year revenue decline to $149.6 million, extending Wednesday's pre-earnings slide. Non-GAAP gross margin came in deeply negative at negative 19.9 percent, though up 70 basis points sequentially on favorable product mix, as persistent factory underutilization kept profitability under pressure.

Wolfspeed is a Durham, North Carolina-based innovator in wide bandgap semiconductor technology, specializing in silicon carbide and gallium nitride materials and devices for power and radio frequency applications, serving high-growth end markets including electric vehicles, fast charging, 5G communications, renewable energy and storage, industrial automation, AI data centers, and aerospace and defense.

A Bright Spot in AI Data Center Demand

Despite the disappointing headline results, AI data center device revenue rose 20 percent sequentially and more than doubled year over year, a bright spot the company highlighted as it works to offset broader weakness elsewhere in the business. Guidance for the first quarter of fiscal 2027 calls for revenue between $140 million and $160 million, with non-GAAP gross margin expected to remain negative and operating expenses guided in the range of $62 million to $66 million, signaling no near-term margin inflection.

The company ended the quarter with approximately $1.1 billion in cash and short-term investments and net Debt of approximately $600 million, after $46 million of convertible notes were voluntarily converted to equity, a move intended to reduce annual interest expense, even as concerns persist around cash burn and roughly $1.7 billion in debt-related filings.

What Investors May Watch Next

Market participants are likely to watch progress toward the company's approximate $800 million annual revenue run rate benchmark for reaching gross margin breakeven, along with continued momentum in AI data center device revenue. New design wins, including recent automotive and power Supply partnerships, and progress on 300mm substrate development are additional factors that may shape sentiment going forward.

Conclusion

Wolfspeed shares fell approximately 13.10 percent to $25.28 intraday, as a much wider than expected fiscal fourth quarter loss and continued revenue decline outweighed strong growth in AI data center device revenue. Whether the stock stabilizes may depend on progress toward gross margin breakeven and continued execution on new design wins.