Wolfspeed (NYSE:WOLF) shares fell sharply in premarket trading on Thursday after the semiconductor manufacturer delivered significantly weaker-than-expected fiscal fourth-quarter results, extending the selloff that began following Wednesday evening’s earnings announcement.
The stock dropped 10.5% to $26.03 before the opening bell as investors reacted to substantial misses on both revenue and adjusted earnings.
Revenue and earnings fall well short of forecasts
Wolfspeed reported an adjusted loss of $2.26 per share for the fiscal fourth quarter of 2026, considerably wider than the consensus forecast for a loss of $0.52 per share.
Quarterly revenue came in at $149.6 million, approximately 33% below analysts’ expectations of $223.55 million. Sales were also around 24% lower than in the corresponding period a year earlier.
The scale of the shortfalls reinforced concerns about Wolfspeed’s operating performance, particularly as the company continues to contend with widening losses and negative gross margins.
TD Cowen maintained its Hold rating following the earnings announcement, adding to the cautious market reaction and suggesting the firm sees limited potential for a significant near-term recovery in the shares.
FY27 guidance offers little reassurance
Management expects first-quarter fiscal 2027 revenue of between $140 million and $160 million.
The midpoint of that range broadly matches the analyst consensus estimate of $150.4 million, but the guidance provided little relief after the magnitude of the fourth-quarter earnings and revenue misses.
Investors remain focused on Wolfspeed’s ability to improve margins, control losses and establish a clearer route towards sustainable profitability.
The company’s partnership with LITEON targeting the AI data centre market remains strategically significant, but the opportunity was insufficient to counter immediate concerns surrounding financial performance.
Wolfspeed selloff driven by company-specific concerns
The wider U.S. equity market provided little explanation for the decline. The S&P 500 was broadly unchanged, while the Dow Jones traded marginally lower and the Nasdaq was only slightly positive.
With power semiconductor peers facing no comparable earnings catalysts during the session, Wolfspeed’s weakness appears predominantly tied to its own results and outlook rather than a broader sector or macroeconomic move.
The shares also traded substantially below their $31.50 opening level and moved closer to the lower end of their wide 52-week range of $1.16 to $80.82.
Taken together, the large earnings miss, weaker-than-anticipated revenue, continued profitability concerns and TD Cowen’s cautious stance have placed renewed pressure on Wolfspeed shares. While its exposure to areas such as AI data centres offers potential longer-term opportunities, investors appear to be demanding clearer evidence of improving financial performance before assigning greater value to that growth story.