Wolfspeed (WOLF -3.35%) experienced a dramatic decline in its stock price during 2024, even amidst an overall positive market trend. The specialist in silicon-carbide technology saw its share price plunge by an astonishing 84.7% over the past year, based on data from S&P Global Market Intelligence. In stark contrast, the S&P 500 index achieved a notable increase of 23.3%, while the Nasdaq Composite index surged by 28.6%, highlighting the struggles of Wolfspeed against a backdrop of robust market performance.
WOLF data by YCharts
Despite the semiconductor sector’s optimistic outlook, Wolfspeed stock faced substantial selloffs throughout the year as the company continued to report significant losses. Adding to investor concerns, the firm’s trajectory toward profitability was jeopardized by the closure of production facilities and the abandonment of plans to establish new plants, raising questions about future growth and sustainability in the competitive market.
Understanding the Factors Behind Wolfspeed’s Stock Collapse in 2024
The year 2024 proved to be an exceptionally challenging period for Wolfspeed. According to the company’s latest quarterly report, it has suffered losses exceeding $750 million over the past twelve months. As it closed its most recent quarter, Wolfspeed reported approximately $3 billion in long-term debt alongside $3.1 billion in long-term liabilities, raising red flags about its financial health and future viability in the semiconductor industry.
Wolfspeed’s ongoing losses and margin challenges gained further importance alongside the cancellation of critical business scaling initiatives aimed at enhancing sales and profitability over time. In August, it was announced that the company would shut down one of its production facilities located in Durham, North Carolina. Subsequently, in October, news broke that Wolfspeed had scrapped plans for a $3 billion manufacturing plant in Germany, further indicating a struggle to maintain operational expansion. Additionally, the closure of a facility in Texas added to the growing list of operational setbacks.
In November, the announcement of CEO Gregg Lowe’s resignation sent shockwaves through the company and the market. Although the stock saw a brief uptick following the leadership transition, it ultimately closed the year with substantial losses, reflecting the ongoing turmoil and uncertainty surrounding Wolfspeed’s business strategy and management direction.
Examining the Ongoing Decline of Wolfspeed Stock in 2025
As 2025 unfolds, Wolfspeed stock has continued to face significant selloffs, with share prices dropping approximately 26% year-to-date as of this writing. These declines come even as the S&P 500 index saw a modest dip of 0.8% and the Nasdaq Composite index experienced a 1.2% pullback. The persistent downward trend in Wolfspeed’s stock raises questions about the market’s confidence in the company’s recovery and long-term prospects.
While no significant company-specific news has emerged to directly trigger these selloffs, Wolfspeed has been ensnared in a broader valuation decline that correlates with prevailing macroeconomic challenges and global geopolitical uncertainties. Recent data from the Bureau of Labor Statistics indicated that the U.S. economy added a substantial number of jobs in December, surpassing economists’ predictions. This development has led to concerns regarding potential inflationary pressures that could impact market stability.
Compounding these challenges, the Biden administration recently introduced sweeping regulations aimed at limiting the export of AI chips to nations such as China, Russia, Iran, and North Korea. While these new restrictions may not directly impact Wolfspeed, they have cultivated a more risk-averse environment among investors, contributing to the ongoing hesitance in the stock market and putting additional pressure on shares of Wolfspeed.
Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Wolfspeed. The Motley Fool has a disclosure policy.
