Wolfspeed (NYSE:WOLF | WOLF Price Prediction) stock is down 12% to $25.74 in Thursday morning trading after the silicon carbide chipmaker posted a fiscal Q4 2026 adjusted loss that came in far wider than analysts expected. Meanwhile, ON Semiconductor (NASDAQ:ON) stock is down 2% to $74.83, drifting lower with the tape rather than reacting to fresh company news. For a broader sector context, the iShares Semiconductor ETF (NASDAQ:SOXX) is down 0.5% to $517.20, a sign the market is treating today’s move as a company-specific event rather than a broader chip selloff.
Even after the drop, Wolfspeed stock remains sharply higher for the year. Through Wednesday’s close, WOLF was up 67% YTD, ON stock was up 41%, and the SOXX ETF was up 73%. Today’s reaction is being layered onto a name that has already rallied hard off its lows.
A Wider Loss Than the Street Modeled
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Wolfspeed reported an adjusted loss of $2.26 per share for the Q4 2026 quarter ended June 28, considerably wider than analysts expected. Revenue came in at $149.6 million, and adjusted non-GAAP gross margin remained negative at 20%. Those numbers frame a business still working through a heavy fixed-cost base after emerging from Chapter 11.
Product segment mix continued to lean on power. Power Products revenue came in at $106.3 million while Materials Products revenue was $43.3 million. The materials line has been the softer part of the story as customers digest inventory and transition toward 200mm substrates.
The bright spot was AI data center demand, where Wolfspeed revenue increased 20% from the prior quarter. For fiscal Q1 2027, management guided revenue to $140 million to $160 million, with the midpoint near the $150.4 million analyst estimate, and non-GAAP operating expenses of $62 million to $66 million. TD Cowen maintained its Hold rating on Wolfspeed stock following the report, signaling Wall Street sees the transformation continuing but hasn’t yet moved to a more constructive stance.
Why ON Semiconductor Isn’t Following the Move
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ON Semiconductor and Wolfspeed both make silicon carbide power products used in electric vehicles, AI data centers, industrial power conversion, and renewable energy. However, ON had no earnings catalyst today and is trading lower more in line with the broader tape than as a direct read-through from Wolfspeed’s results.
ON stock is up 41% YTD through Wednesday’s close, and some traders are quicker to trim on any semi-related earnings reaction, even when the news doesn’t target ON directly. The Wolfspeed report does not carry a direct read-through to ON’s own products or customer mix.
The sector backdrop supports that read. With SOXX down only 0.5% while Wolfspeed stock is down 10%, traders are isolating the disappointment to Wolfspeed’s execution rather than to silicon carbide demand or the wider semiconductor cycle.
Silicon Carbide Bet Rests on Margin Recovery
Wolfspeed emerged from Chapter 11 restructuring in September 2025 and has been working to reduce its debt and its cost of capital. CEO Robert Feurle stated, “We continued to expand our device business, highlighted by strong growth in AI data center applications and the launch of our fifth-generation SiC MOSFET.” The bull case rests on that AI ramp eventually filling the fabs and lifting utilization; the bear case is that a negative 20% gross margin means every incremental sale still loses money at the gross line.
That gap makes Wolfspeed stock a turnaround wager rather than a play on current earnings. Traders could look for signs that AI data center revenue growth accelerates enough to lift factory utilization and push gross margin back toward zero. Given the wide loss, negative gross margins, and WOLF stock’s sharp YTD run, position sizing should stay modest until Wolfspeed’s margin trajectory becomes clearer.
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