Wolfspeed Shares Find Their Footing After a Turbulent Year

Following a period of extreme volatility, Wolfspeed's stock is showing initial signs of stabilization. The share price closed at approximately $18.43 on the final trading day before the holiday break, a level significantly above its yearly low of around $0.39. A key strategic agreement within the electric vehicle sector is largely credited for this recent recovery. The critical question for investors is whether this marks the beginning of a durable trend reversal.

The stock's trading range between roughly $0.40 and over $36 per share in 2025 highlighted the substantial liquidity and operational risks that previously dominated the narrative. Early in the year, concerns centered on capital formation and the slower-than-anticipated production ramp-up at the Mohawk Valley facility. The more stable price action recently suggests the most acute liquidity fears have eased. This improvement is attributed to new commercial agreements as well as initiated restructuring efforts aimed at reducing the company's operational cash burn.

Strategic Toyota Partnership Provides Anchor

A confirmed collaboration with Toyota Motor, announced on December 9, serves as a potential inflection point. Under the agreement, Wolfspeed will supply automotive-grade silicon carbide (SiC) MOSFETs for the onboard charging systems in Toyota's battery-electric vehicle fleet.

This partnership holds importance for several reasons:

Should investors sell immediately? Or is it worth buying Wolfspeed?

• Validation of Technology: Adoption by a high-volume manufacturer like Toyota reinforces the industrial viability of Wolfspeed's SiC technology.
• Revenue Visibility: Integration into a vehicle platform enhances future revenue predictability, directly addressing earlier concerns about cash flow development.
• Industry Trend Alignment: The move underscores the broader industry shift toward SiC components, which enable faster charging and greater efficiency compared to traditional silicon-based parts.

This news contributed to calmer trading in December, with the stock posting a modest gain of 0.49 percent on the last pre-holiday session.

Valuation and Market Sentiment

Wolfspeed currently trades at a price-to-sales multiple of approximately 0.6. Value-focused analysts view this as a substantial discount compared to many other semiconductor equities. Simultaneously, the low multiple reflects the still-relevant risks on the company's path to profitability.

Short-term technical indicators present a mixed picture:

• Recovery Mode: The stock has posted a one-month return of about 6.9%, indicating a slight improvement in sentiment heading into year-end.
• Resistance Ahead: A technical resistance zone is identified between $19 and $20; a decisive break above this level would be viewed as a signal confirming upward momentum.
• Support Holding: While trading volume was recently below average due to the holidays, the market's ability to hold support around the $18 level is seen positively by traders.

The previously dominant "Strong Sell" signals have softened, yet market participants remain cautious. The focus now shifts to Wolfspeed's operational execution of the Toyota contract and the company's ability to maintain its improved liquidity position through the transition beyond 2026.