Wolfspeed Plunges 15.35% on Revenue Miss, Workforce Cut

On May 9, 2025, Wolfspeed's stock experienced a significant drop of 15.35% in pre-market trading, reflecting investor concerns and market reactions to recent developments.

Wolfspeed's forecast for 2026 revenue fell below Wall Street estimates, coupled with a 7% decline in third-quarter revenue. This disappointing outlook has led to a sharp decline in the company's stock price, as investors reassess their positions in light of the revised projections.

Despite having $1.4 billion in cash reserves, the company's stock remains undervalued, and some investors are considering the possibility of a share buyback to boost confidence in Wolfspeed's long-term prospects. However, the recent earnings report, which showed an adjusted EPS of -$0.72 beating expectations but revenue of $185 million missing forecasts, has further dampened investor sentiment.

Wolfspeed's announcement of a 25% workforce reduction adds to the uncertainty surrounding the company's future. This move, while aimed at cost-cutting, may also signal broader challenges within the organization. The high short interest of 41% in Wolfspeed's stock suggests that a significant portion of the market is betting against the company's recovery.