Shares of Wolfspeed surged 7.4% to $66.25 on June 4, extending a fierce three-day rally as momentum traders piled into the stock following a bullish research note and a string of strategic announcements positioning the company as a power-chip supplier for AI data centers. The stock is now up roughly 223% year to date , but investors are betting on a future that hasn't arrived yet.
A Single Analyst Note Sparked a Frenzy
A bullish report from Citrini Research called Wolfspeed a key beneficiary of the AI infrastructure boom and argued its silicon carbide factories are strategic, scarce assets that competitors are unlikely to replicate quickly.
Shares initially jumped nearly 20%, with premarket moves as high as 22%. The current move is a continuation of that momentum — traders are chasing gains despite the stock's wild swings, including a 19.6% single-day drop during late-May profit-taking.
The Company Is Building an AI Sales Team From Scratch
On June 1, Wolfspeed announced a dedicated data center solutions team and regional office in the San Francisco Bay Area, aimed at closer alignment with leading hyperscalers and equipment makers. CEO Robert Feurle framed the urgency starkly: "Moving to higher voltages is no longer optional — it's a necessity."
AI data center revenue grew about 30% sequentially in the most recent quarter — promising, but still a small slice of the pie. Meaningful revenue contributions from data centers may take several quarters to materialize.
The Financials Tell a Sobering Story
Q3 fiscal 2026 revenue was $150.2 million with a $119.9 million net loss.
Gross margin sits at roughly negative 31% and operating margin at negative 196% — meaning the company loses nearly $2 for every $1 of revenue after all expenses. Free cash flow was approximately negative $122.8 million.
Only two analysts cover the stock, and the consensus rating is "Sell" with a $40 price target — roughly 40% below today's price.
Post-Bankruptcy Reality Check
Wolfspeed emerged from Chapter 11 in September 2025 with reduced debt and a new capital structure.
It has since cut debt by another $97 million and expects $62 million in lower annual interest costs. But Morningstar pegs fair value at just $43.82 with "very high" uncertainty , and the stock is already trading 50% above that mark. Investors are paying for a vision of AI-driven power demand that is real in theory but unproven on Wolfspeed's income statement.