'Lurking tiger': author of viral report on AI threat finds new boom beneficiary

Citrini Research, the research firm that scared investors earlier this year with its apocalyptic forecast about the devastating effects of AI on the economy, has staked its new report on Wolfspeed, a still unprofitable semiconductor manufacturer. Citrini named it as one of the likely beneficiaries of the new phase of the AI boom, even though the small-cap company filed for bankruptcy protection back in June 2025, and a report for the last quarter confirmed that it was unprofitable.

Wolfspeed shares were up 8% in trading on Thursday, May 14, after rising 20% on Wednesday. And since the beginning of the year, the company's value has already increased by more than 270%.

Wolfspeed produces silicon carbide (SiC) semiconductor materials and components. Citrini Research analysts estimate that demand for AI will overwhelm the challenges faced by analog and power semiconductor manufacturers, particularly due to an expected shortage of multilayer ceramic capacitors, which Wolfspeed specializes in, the report said.

The company deals with power electronics - components that help electricity work efficiently under very high loads, temperatures and voltages. This technology has become relevant for data centers. SiC chips are also in demand in power grids, military and industrial electronics. Wolfspeed has invested billions of dollars in new fabs and production of large-diameter SiC wafers, writes Business Insider. Its SiC chips are used in electric vehicle power systems, inverters and fast charging units. At the same time, due to the growing debt load, the company was forced last year to engage in debt restructuring and file for bankruptcy protection.

"Wolfspeed is a lurking tiger that is ready to turn into a dragon. The company deserves a high valuation not just based on the theoretical replacement cost of its factories, but on the fact that no one can replace them. No one at all," Citrini analysts wrote. - It's the only game in town."

Analysts explain that the company ramped up capacity in advance to meet future demand, and did so aggressively that it went bankrupt. Now, however, according to Citrini, Wolfspeed is in an ideal position, as the AI boom is likely to lead to a surge in demand for its products.

"Capex looked disruptive to business value in 2023 - and it really was," the report said. - But by 2027, it looks like one of the most forward-thinking infrastructure bets in the wide-area semiconductor industry. The market is starting to evaluate this as a recovery story for the company, but we think it should be evaluated as an inevitable beneficiary of the trend."

In the third quarter of fiscal 2026, which ended March 29, Wolfspeed's revenue fell year-over-year by 19% to $150 million. Net loss was nearly $120 million. Gross margin remained negative: minus 27%. And free cash flow - minus $90 mln.

Meanwhile, since bankruptcy, the company has reduced debt by about $97 million, reduced future interest expense by about $62 million per year and has about $1.2 billion in liquidity on its balance sheet.