Wolfspeed Stock: A 84.7% Plunge in 2024 and Sinking Further in 2025

Wolfspeed (WOLF) stock has been on a rollercoaster ride, with a significant drop of 84.7% in 2024 and continued losses in 2025. The company's silicon-carbide technology, once a promising growth driver, has failed to deliver the expected results. Let's delve into the reasons behind Wolfspeed's stock plummet and explore the potential outlook for the company.

Wolfspeed's stock performance has been dismal, with the company's share price falling from a high of $10.50 in January 2024 to a low of $1.65 in December 2024. The stock has continued to decline in 2025, with a year-to-date loss of approximately 26%. The company's struggles can be attributed to several factors, including mounting losses, margin problems, and canceled business scaling projects.

Wolfspeed's revenue growth has slowed down significantly in recent years, with a CAGR of 8% from fiscal 2019 to fiscal 2024. The company's adjusted gross margin also took a hit, falling from 36% in fiscal 2020 to 13% in fiscal 2024. These financial struggles have raised concerns about the company's path to profitability.

Geopolitical dynamics and macroeconomic pressures have also contributed to Wolfspeed's stock decline in 2025. In January 2025, the Biden administration unveiled a sweeping series of regulations that will limit the export of AI chips to China, Russia, Iran, and North Korea. While these restrictions are unlikely to directly affect Wolfspeed, they have caused investors to take a more risk-averse approach to the stock market at large, leading to a decline in Wolfspeed's stock price.

Management changes and strategic decisions have played a significant role in Wolfspeed's stock performance. In November 2024, it was announced that Wolfspeed CEO Gregg Lowe was resigning from his position, and the company was in the process of finding a new leadership team. This leadership shakeup initially led to gains in the stock price, but the company still closed out the year with massive losses. The stock continued to see big selloffs early in 2025, with the company's share price down roughly 26% year to date as of this writing.

Wolfspeed has made strategic decisions to optimize its capital structure and drive performance in its state-of-the-art 200-millimeter fab. The company plans to accelerate the shift of device fabrication to its 200mm Mohawk Valley Fab, which is expected to reach 25% utilization in Q1 FY2025, one quarter ahead of schedule. This strategic decision aims to improve profitability and give the company confidence to assess the timing of the closure of its 150mm device fab in Durham.

Furthermore, Wolfspeed has taken proactive steps to slow down the pace of its CapEx by approximately $200 million in fiscal 2025 and identify areas across its entire footprint to reduce operating costs. These strategic decisions are aimed at optimizing the company's capital structure for both the near term and long term.

However, despite these strategic decisions and management changes, Wolfspeed's stock performance has continued to be negatively impacted by macroeconomic pressures, geopolitical dynamics, and concerns about inflationary pressures. The company's stock has seen a significant valuation pullback, and investors have taken a more risk-averse approach to the stock market at large.

In conclusion, Wolfspeed's stock plummet in 2024 and continued decline in 2025 can be attributed to a combination of financial struggles, geopolitical dynamics, and macroeconomic pressures. While the company has made strategic decisions to optimize its capital structure and improve profitability, the outlook for Wolfspeed remains uncertain. Investors should closely monitor the company's progress and assess the potential risks and rewards before making any investment decisions.