WOLF · Wolfspeed
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a daily close above $35.28
Note written ·
Price against the kill line
29.6% clear of its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close above $35.28, on record since 11 November 2026. The shares are down 29.0% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close above $35.28, which would show the shares leading the S&P 500 and the market rewarding the margin recovery. A fiscal second-quarter non-GAAP gross margin at or above breakeven, or revenue above the $175 million top of guidance, would point the same way.
Research onlyNot in the portfolio.
Key figures from the filings · Technology
Quarter to 27 September 2026, filed 5 November 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 155
- Revenue, change on a year (%)
- −21.2
- Gross margin (%)
- −21.9
- Operating margin (%)
- −72.8
- Free cash flow, four quarters ($M)
- −349
- Net cash, cash less debt ($M)
- −686
- Enterprise value to sales (×)
- 3.2
- Free-cash-flow yield (%)
- −26.2
All filed numbers
What Wolfspeed reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| first filed | 155 | −21.2 | −21.9 | −72.8 |
| first filed | 150 | −24.1 | −24.5 | −77.1 |
| first filed | 150 | −19.0 | −26.6 | −76.1 |
| first filed | 169 | −6.6 | −46.5 | −94.0 |
| first filed | 197 | +1.1 | −39.2 | −82.0 |
| first filed | 197 | −1.8 | −13.0 | −295.2 |
| Pre-tax income ($M) | −144 |
| Net income ($M) four quarters: −560 | −144 |
| Diluted shares, change on a year (%) against the quarter to 28 September 2025 | −64.8 |
| Operating cash flow ($M) | −265 |
| Capital spending ($M) | 83.5 |
| Free cash flow ($M) | −349 |
| Cash and short-term investments ($M) | 995 |
| Debt ($M) long-term debt | 1,681 |
| Net cash, cash less debt ($M) | −686 |
| Deferred revenue ($M) −28.9% on a year | 62.9 |
| Backlog, orders not yet delivered ($M) | Not reported |
| Receivables ($M) | 109 |
| Inventory ($M) | 204 |
| Shareholders' equity ($M) | 804 |
| Market value ($M) | 1,330 |
| Enterprise value, market value plus net debt ($M) | 2,016 |
| Enterprise value to sales (×) | 3.2 |
| Enterprise value to operating income (×) | Not meaningful |
| Price to earnings (×) | Not meaningful |
| Price to book value (×) | 1.7 |
| Free-cash-flow yield (%) | −26.2 |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 51.1% of shares outstanding sold short, 4.2 days of average trading to cover, +2.0% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $0 |
| 12 monthsfrom | $0 | $0 |
The thesis
Wolfspeed's first-quarter report improved the picture, but the shares are still more likely to lag the S&P 500 over the next three months. Revenue beat estimates and the gross-margin loss narrowed, yet the company burned cash and the $1.5 billion government loan is still conditional. The fiscal second-quarter report, due in early 2027, settles whether the margin recovery is real.
On 4 November 2026 Wolfspeed reported fiscal first-quarter 2027 revenue of $155.0 million, against $196.8 million a year earlier and a $150.2 million analyst estimate cited by Benzinga. Non-GAAP gross margin was (13)%, compared with (26)% a year earlier. GAAP gross margin was (22)%. Non-GAAP loss per share was $(2.03), against a $(1.99) consensus estimate. GAAP net loss was $143.8 million.
Guidance for the second quarter is revenue of $155-175 million, with non-GAAP gross margin improving toward breakeven and non-GAAP operating expenses of $65-69 million. Cash, equivalents and short-term investments fell to $995.1 million. Free cash flow was negative $96.5 million. All figures are from the company's 4 November 2026 release.
The shares closed at $27.68 on 11 November 2026. That is above the $23 target TD Cowen set on 5 November 2026 when it kept its Hold rating. The price already assumes the margin recovery continues and the loan closes.
Bullish and bearish views on Wolfspeed, Inc.
The bull case on Wolfspeed, Inc. (WOLF), in brief: revenue beat after four weaker quarters. The bear case: cash is burning.
Bull case
- Revenue beat after four weaker quarters. Revenue of $155.0 million on 4 November 2026 was above the midpoint of the $140-160 million guide. 247WallSt called it the first beat since the Chapter 11 exit and the end of four straight sequential declines.
- Gross margin is moving the right way. Non-GAAP gross margin of (13)% compares with (20)% in the fiscal fourth quarter reported on 19 August 2026. Management guides the second quarter toward breakeven.
- Capital spending has dropped. Capital expenditures were $10.6 million in the quarter, down from $104 million a year earlier, per 247WallSt on 4 November 2026.
- Government financing is on the table. The 8-K of 7 October 2026 describes a conditional commitment for a senior secured loan of up to $1.5 billion with a 30-year term from the Department of War's Office of Strategic Capital.
- Long-term supply agreements. Company news in October reported multiyear silicon carbide (SiC) supply agreements with BorgWarner (28 October 2026) and Infineon Technologies (15 October 2026). No contract values or volumes were disclosed.
Bear case
- Cash is burning. Free cash flow was negative $96.5 million in the first quarter, and cash fell to $995.1 million from $1.1 billion at the 19 August 2026 year-end report.
- The loan is not yet money. The company's 4 November 2026 release still describes the commitment as dependent on due diligence, definitive agreements and government approvals.
- Warrants and resales add shares. The proposed terms give the government warrants for up to 7.5% of fully diluted equity as tranches fund, per the 8-K. A June 2026 resale prospectus registers up to 24,072,041 shares for selling holders.
- Revenue is still falling year over year. First-quarter revenue of $155.0 million was below the $196.8 million of the year-earlier quarter.
- Losses remain wide. The GAAP net loss was $143.8 million, or $(2.61) per share, and the non-GAAP loss per share missed the consensus estimate by $0.04.
- The market reaction was negative at first. The shares closed at $22.79 on 4 November 2026 and $20.36 on 5 November 2026, the 52-week closing low being $14.80 on 30 March 2026. TD Cowen cut its target to $23 on 5 November 2026.
Price setup
The shares closed at $27.68 on 11 November 2026. They rebounded from $20.36 on 5 November 2026 through closes of $23.79 (6 November 2026), $26.12 (9 November 2026) and $26.23 (10 November 2026).
The close is above the 50-day average of $26.32 and below the 200-day average of $30.5, both as of 11 November 2026. The 52-week high is $80.82 (intraday, 22 May 2026), and the last close is 65.8% below it. The three-month change is −12.2%, against a close of $31.51 on 13 August 2026.
Insider filings show small activity. Six directors each received a 7,415-share grant on 27 October 2026, per SEC Form 4 filings. The chief financial officer and chief operating officer had shares withheld for tax at $25.91 on 15 October 2026.
Catalysts ahead
- ~4 February 2027 (est.): Q2 fiscal 2027 results (quarter ending late December 2026). Tests the guide of $155-175 million revenue and non-GAAP gross margin near breakeven, and shows whether cash burn is shrinking from the $96.5 million free cash outflow of Q1.
What would change the view
A daily close above $35.28, which would show the shares leading the S&P 500 and the market rewarding the margin recovery. A fiscal second-quarter non-GAAP gross margin at or above breakeven, or revenue above the $175 million top of guidance, would point the same way.
What it trades with
Wolfspeed trades with other SiC and power-semiconductor makers and responds to electric-vehicle demand news. Its AI data center product line and defense-linked financing add company-specific drivers. The 7 October 2026 loan announcement and the 4 November 2026 results moved the shares more than sector news did, and the 6 November 2026 rebound followed a close of $20.36 with no company filing of note.
The evidence, claim by claim (7)
- Q1 fiscal 2027 revenue was $155.0 million versus $196.8 million a year earlier; non-GAAP gross margin was (13)% versus (26)% a year earlier; GAAP gross margin was (22)%. Wolfspeed Q1 FY27 earnings release (8-K Exhibit 99.1) · as of
- Q1 non-GAAP loss per share was $(2.03) against a $(1.99) consensus estimate; GAAP net loss was $143.8 million, or $(2.61) per share. Wolfspeed Q1 FY27 earnings release; Benzinga estimate comparison · as of
- Q2 fiscal 2027 guidance: revenue $155-175 million, non-GAAP gross margin improving sequentially toward breakeven, non-GAAP operating expenses $65-69 million. Wolfspeed Q1 FY27 earnings release · as of
- Cash, equivalents and short-term investments were $995.1 million; free cash flow was negative $96.5 million on operating cash flow of negative $84.2 million. Wolfspeed Q1 FY27 earnings release · as of
- Conditional commitment for a senior secured loan of up to $1.5 billion, 30-year term, from the Department of War's Office of Strategic Capital, with warrants for up to 7.5% of fully diluted equity issued as tranches fund. Wolfspeed 8-K Exhibit 99.1 · as of
- TD Cowen kept a Hold rating on Wolfspeed and lowered its price target to $23. TD Cowen note, reported in company news feed · as of
- Capital expenditures were $10.6 million in the quarter, down from $104 million a year earlier. 247WallSt report on Wolfspeed Q1 FY27 results · as of
Sources
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