Navitas Semiconductor (NVTS Quick QuoteNVTS - Free Report) reported a narrower first-quarter 2026 loss than expected, supported by continued progress in its shift toward higher-value, high-power end markets. The company reported a loss of 4 cents per share, which beat the Zacks Consensus Estimate by 20%. NVTS reported a loss of 6 cents in the year-ago quarter and a loss of 5 cents in the previous quarter.

Revenues were $8.6 million, down 38.7% year over year, but beat the consensus mark by 7.5%. Management said high-power markets represented a large majority of sales and surged about 35% year over year, lifting mix and supporting margin expansion.

NVTS shares have declined roughly 10% since it reported the results on May 5. The company closed at $15.79 on May 7 and was up more than 1.5% at the time of writing this article. Year to date, Navitas shares have surged 121.8%.

NVTS Returns to Sequential Growth as Mix Improves

NVTS posted 18% sequential revenue growth that was attributed to the rebound to higher demand across its targeted high-power markets, including AI data centers and grid and energy infrastructure, as the company continues to reduce reliance on mobile and low-end consumer.

Navitas is positioning its gallium nitride (GaN) and high-voltage silicon carbide (SiC) portfolio for AI-driven power needs across data centers and the supporting grid infrastructure. Management highlighted recent customer and technology activity tied to next-generation power delivery, including an 800V-to-6V DC-DC board designed for higher-density AI data center architectures, and a 250-kW solid-state transformer demonstration that leverages SiC devices.

In the earnings call, management also pointed to momentum within “AI infrastructure,” which combines data center and grid efforts. The company said that the category grew 50% sequentially from the fourth quarter of 2025 to the first quarter of 2026, underscoring the pace of engagement as AI-related power requirements rise.

Navitas continues to frame AI data center power as a multi-step architecture transition that expands content opportunity for wide bandgap semiconductors. Management emphasized that higher-power AC-DC power supply units and evolving high-voltage DC distribution are driving interest in both SiC and GaN, with GaN expected to be increasingly important as conversion moves closer to the rack and power density requirements rise.

The company also discussed progress moving from device-level testing to system and board-level evaluation with customers for its newest GaN and SiC products. Management indicated that it has delivered “final samples” intended to support production ramps and is working closely with customers on system optimization and validation.

NVTS Keeps Costs Disciplined While Funding Key Programs

The improving mix showed up in profitability metrics. Non-GAAP gross margin expanded 30 basis points (bps) sequentially and 90 bps year over year to 39%, reflecting a greater contribution from higher-value, high-power programs and a smaller contribution from the lower-margin legacy business.

On the expense front, non-GAAP operating expenses were $15 million, essentially flat sequentially. Management said cost discipline, particularly in selling, general and administrative (down 31.3% year over year to $5.7 million), helped create room to prioritize research and development (up 6.8% year over year to $9.4 million) tied to its high-power roadmap without driving a step-up in the overall operating cost base.

Non-GAAP operating loss was $11.7 million, improving from a loss of $12.1 million in the prior quarter and a loss of $11.8 million in the year-ago quarter.

Navitas Balance Sheet Remains a Key Support

Navitas ended the first quarter of 2026 with $221 million in cash and cash equivalents and no outstanding debt, providing flexibility to support working capital and product roadmaps. The company exited fourth-quarter 2025 with a cash balance of $236.9 million.

Inventory was $14.9 million, up from $13.3 million at 2025-end, which management said reflects measured investment to support anticipated growth. With channel inventories described as healthier following prior streamlining actions, Navitas emphasized disciplined monitoring going forward. The company’s balance sheet strength remains a notable element of its strategy as it pursues expansion in high-power markets tied to AI infrastructure and industrial electrification.

NVTS’ Outlook Calls for Continued Sequential Growth in Q2

For the second quarter of 2026, NVTS expects revenues of $10 million, plus or minus $0.5 million, which implies continued sequential growth. Non-GAAP gross margin is projected at 39.25%, plus or minus 75 bps, suggesting continuation of incremental mix-driven expansion.

Non-GAAP operating expenses are expected to remain roughly flat at $14.5 million to $15.5 million. Management said it may selectively invest to accelerate growth, but it is aiming to keep spending disciplined as it scales the high-power business.

Zacks Rank & Stocks to Consider

Navitas currently has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader Zacks Computer and Technology sector that are set to report their quarterly results are Cisco Systems (CSCO Quick QuoteCSCO - Free Report) , Applied Materials (AMAT Quick QuoteAMAT - Free Report) and Keysight Technologies (KEYS Quick QuoteKEYS - Free Report) . Keysight Technologies sports a Zacks Rank #1 (Strong Buy) at present, while both Cisco and Applied Materials carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Cisco, Applied Materials and Keysight Technologies are set to report their respective quarterly results on May 13, 14 and 19. Year to date, shares of Cisco, Applied Materials and Keysight Technologies have returned 19.7%, 59.9% and 74.8%, respectively.