Is Wolfspeed an Underrated Buy or Just Another Meme Stock?
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Research suggests that Wolfspeed (WOLF 10. In contrast, 07%) has been one of the most volatile stocks on the market this year. As of Monday's close, it was down around...
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July 18, 2025
10:00 AM
The Motley Fool
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Re suggests that Wolfspeed (WOLF 10
In contrast, 07%) has been one of the most volatile stocks on the market this year
As of Monday's close, it was down around 80% since the start of the year, and in the early stages of Chapter 11 bankruptcy ceedings
However, Yet, despite seemingly atrocious returns and no shortage of headwinds, investors have been buying up the stock in the early part of July
The company, which refers to itself as "pioneers of silicon carbide, and creators of the most advanced semiconductor nology on earth," has amassed losses totaling more than $1. 1 billion over the past four quarters
However, it has brought on a new chief financial officer with an extensive track record of transforming and restructuring es, which has made investors bullish on its ability to turn things around (this bears monitoring), in today's financial world
On the other hand, Could Wolfspeed be an attractive stock to buy on weakness, or has it simply become the meme stock
Image source: Getty Images
Furthermore, Wolfspeed's trading volumes have spiked On June 30, Wolfspeed said it would be taking steps to strengthen its capital structure, which include filing for Chapter 11 bankruptcy
Additionally, The company hopes to reduce its debt by $4, in today's financial world. 6 billion (70%)
The believes it will "be better positioned to execute on its long-term growth strategy and accelerate its path to fitability (remarkable data). " While a bankruptcy filing is not great news for a, it has resulted in a spike in Wolfspeed's trading volumes
Moreover, From June 30 through to July 8, the stock surged by a staggering 530%, amid market uncertainty
WOLF 30-Day Average Daily Volume data by YCharts
A new finance leader gives investors some hope Another positive catalyst for the stock was news that it was appointing Gregor van Issum as its new chief financial officer, which the company announced on July 7, considering recent developments
Furthermore, It notes that van Issum has "more than 20 years of experience in transformational restructuring and strategic financing positions across the nology industry. " Having an experienced leader to help turn around the is good for the company, but that doesn't necessarily mean it's going to be smooth sailing from here on out
The big blem: Wolfspeed's gross margins need drastic imvement
WOLF Gross fit Margin (Quarterly) data by YCharts
On the other hand, In the company's most recent quarter, which on March 30, even its adjusted gross margin percentage (after factoring out stock-based compensation and restructuring costs) was minuscule at 2%
Moreover, Even if the company reduces its debt load, its fundamentals are a big concern
Wolfspeed has incurred steep net losses, and it has burned through $709 million in the trailing 12 months over the course of its day-to-day operating activities
There are a lot of blems with the, and a turnaround won't be easy, regardless of who's in charge
However, Wolfspeed is an incredibly risky stock to buy Existing Wolfspeed holders will only receive between 3% and 5% of the new restructured company
Even if its debt load is significantly reduced, the fundamental issues around its abysmal gross margins make it highly unly that the will be worth in once the restructuring is complete
At the same time, Wolfspeed resembles more of a high-risk meme stock than a company worth in today
Additionally, While it may experience short-term gains, there are far better options for growth investors to consider (something worth watching)
David Jagielski has no position in any of the stocks mentioned, in today's financial world
The Motley Fool has positions in and recommends Wolfspeed
Market analysis shows Motley Fool has a disclosure policy.
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