Wolfspeed stock just dropped 9.4% in a single session, yet the headline from this quarter is not a sudden collapse in demand. The shock is the stubborn profit squeeze. Revenue landed near guidance at about US$150 million, while adjusted gross margin stayed deeply negative and adjusted EBITDA loss held at roughly US$62 million. The market is reacting more to that ongoing cash burn and thin path to breakeven than to top line progress, setting up a debate over whether this is fear finally catching up to the story or a short term overreaction.

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Q4 2026 Earnings Summary

• Revenue (Q4 2026 vs. Q4 2025): US$149.6 million vs. US$197.0 million (decline of 24.1%)
• Net Loss (Q4 2026 vs. Q4 2025): US$145.4 million loss vs. US$669.3 million loss (loss narrowed by 78.3%)
• Basic EPS (Q4 2026 vs. Q4 2025): US$2.81 loss per share vs. US$514.91 loss per share (loss per share improved very sharply)
• Adjusted Gross Margin (Q4 2026 vs. Q3 2026): Negative 19.9% vs. negative 20.6% (modest sequential margin improvement)

Prefer clean charts over scrolling through another wall of earnings tables and margin figures? View Wolfspeed’s full financial picture, including a clear look at its balance sheet strength and obligations, in the company report for Wolfspeed.

Wolfspeed’s growth story meets early financial progress

For bulls, Wolfspeed’s earnings keep the long term SiC story intact but still early. Revenue landed around guidance and device sales grew on stronger AI data center demand, which lines up with the multi theme exposure investors expect. Data center revenue more than doubled year over year and rose sequentially. Cash of roughly US$1.1b and lower capex in Q4 give the company time to keep scaling its 200 mm platform and convert recent design wins in autos and power infrastructure into higher fab utilization.

Profit squeeze and cash burn still front and center

The bearish angle around Wolfspeed’s execution risk finds support in these numbers. Revenue fell around 24% year over year and gross margin stayed deeply negative, with EBITDA loss roughly US$62 million and Q1 guidance pointing to another quarter of negative margins. The stock’s 9.4% drop after the report and multi month share price decline show investors remain focused on underutilized capacity and ongoing cash burn, even with US$1.1b in cash and some voluntary note conversions easing interest costs.

Compare Wolfspeed’s internal story of growing AI data center exposure and ample cash with a stock that just declined 9.4% on lingering margin concerns. See the consensus price target analysis for Wolfspeed to find out how closely current Wall Street targets line up with that tug of war.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.