Wolfspeed’s Financial Report Reveals Deep Losses Amid Strategic Pivot

Wolfspeed's latest quarterly figures, covering the period ending December 28, 2025, paint a picture of a company navigating persistent financial strain despite its recent emergence from Chapter 11 bankruptcy proceedings. The semiconductor manufacturer reported a significant net loss while aggressively pursuing cost reductions and a foundational shift in its manufacturing technology. A critical question for investors is whether burgeoning revenue from artificial intelligence data centers can offset a dim near-term sales outlook.

Key Financial Results (Q2 Fiscal 2026):
* Revenue: $168 million.
* GAAP Net Loss: $151 million.
* Liquidity Position: $1.3 billion in cash, cash equivalents, and short-term investments.
* Capital Expenditures: Fell by 90% year-over-year.

The company's profitability metrics remain under severe pressure. It posted a negative GAAP gross margin of 46% and an adjusted EBITDA of negative $82 million for the quarter. Management's guidance for the current third quarter anticipates further challenges, forecasting revenue to decline to a range of $140 million to $160 million, with margins expected to stay in negative territory.

In response to its financial position, Wolfspeed has enacted stringent efficiency measures. The company has successfully reduced its annualized operating expenses by $200 million compared to the prior-year period. Concurrently, a major technological transition is underway in its production facilities.

Should investors sell immediately? Or is it worth buying Wolfspeed?

The legacy 150-millimeter wafer fabrication at its Durham site has been shuttered ahead of schedule. Wolfspeed is now concentrating its entire manufacturing output on the more cost-effective 200-millimeter technology. In a move signaling its long-term research ambitions, the firm also demonstrated a prototype 300-millimeter silicon carbide wafer. To strengthen its balance sheet, Wolfspeed allocated $175 million from a total of $700 million in received tax refunds toward repaying long-term debt.

Diversification Efforts and Forward-Looking Plans

A notable bright spot emerged in the company's earnings report: revenue related to AI data center applications grew by approximately 50% sequentially. This surge highlights Wolfspeed's strategic push to diversify its income streams beyond its core automotive sector.

Nevertheless, the electric vehicle market remains a vital pillar of its business. During the quarter, the company solidified new supply agreements, including a deal with Toyota for onboard charging systems and another with Hopewind for industrial inverters.

Looking ahead, Wolfspeed has announced it will provide an updated long-term strategic plan in the first half of calendar year 2026. This roadmap is slated to include revised financial targets and a detailed blueprint for future capital allocation. Until then, the primary focus for executives remains stabilizing core operations and improving margin performance.