Wolfspeed Inc. (NYSE:WOLF) stock is trading lower in Thursday’s premarket session after the company reported mixed fourth-quarter results.

Earnings Snapshot

Wolfspeed reported an adjusted loss of $2.26 per share, beating the consensus estimate for a loss of $2.45.

Revenue totaled $149.6 million, missing the $224.48 million Street estimate.

Adjusted gross margin improved 70 basis points sequentially to negative 19.9%. A favorable product mix helped results, including higher AI sales in the Power segment and stronger RF sales in Materials.

Operating cash flow was negative $54 million. That figure included a $41 million benefit from lower inventory.

Wolfspeed ended the quarter with about $1.1 billion in cash and short-term investments and roughly $600 million in net debt.

AI Data Center Demand Drives Device Sales

Device revenue reached about $106 million, up 6% sequentially, driven by AI data center demand. Materials revenue totaled about $43 million.

AI data center revenue rose about 20% sequentially. It also more than doubled from fiscal 2025 to fiscal 2026, partly offsetting weaker automotive results.

Wolfspeed secured new design wins with power supply companies Lite-On and Magmeet, which serve multiple hyperscalers. The company is also targeting opportunities tied to high-voltage direct current AI architectures, battery backup units, supercapacitors and other data center applications.

Wolfspeed said its silicon carbide technology and vertically integrated 200-millimeter manufacturing capacity position it to benefit from long-term AI data center infrastructure growth.

However, factory underutilization remained the biggest drag on margins. As a result, higher utilization remains a key factor for future margin improvement.

Wolfspeed Expands Data Center Push

Wolfspeed launched a dedicated Data Center Solutions team focused on its fastest-growing end market. Two industry veterans with expertise in high-voltage AI and data center power will lead the group.

The company also highlighted its Gen 5 silicon carbide MOSFET technology. Wolfspeed is developing and producing Gen 5 products at its automated 200-millimeter Mohawk Valley facility in New York.

In aerospace and defense, Wolfspeed signed an agreement with GE Aerospace (NYSE:GE) to accelerate high-voltage silicon carbide adoption across industrial, aerospace and defense markets.

In automotive, Wolfspeed continues to expand its relationship with Toyota through an onboard charging partnership. It also secured new business with a European Tier 1 supplier supporting a large German automaker’s onboard charger.

Meanwhile, the Materials business continues to serve 150-millimeter long-term agreement customers as they transition to 200-millimeter technology. The company has also begun shipping initial 300-millimeter substrate engineering samples to several customers for evaluation.

Wolfspeed Issues First-Quarter Outlook

Wolfspeed expects first-quarter revenue of $140 million to $160 million, compared with the $150.4 million analyst estimate.

The company expects adjusted gross margin to remain negative during the quarter.

WOLF Stock Price Action: Wolfspeed shares were down 12.38% at $25.49 in Thursday’s premarket trading.

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