Why Navitas Semiconductor Stock Plummeted This Week
Key Points
Navitas stock surged earlier in the week thanks to news that the company's tech was being showcased by Nvidia.
The company's share price plummeted in response to rising fears that the Federal Reserve will raise interest rates this year.
May's jobs growth came in much stronger than expected, which could give the Fed more leeway to hike rates.
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Navitas (NASDAQ: NVTS) stock saw a substantial valuation pullback this week, with it share price falling 7.6% across the stretch. Over the same period, the S&P 500 fell 2.6%, and the Nasdaq Composite declined by 4.7%.
Navitas had actually been strongly in the green earlier in the week thanks to bullish momentum for semiconductor stocks and news that Nvidia was featuring its tech at a conference, but the stock saw a strong bearish reversal to close the week. The Bureau of Labor Statistics (BLS) published its jobs report for May on Friday, and the print helped spur a huge sell-off for growth stocks.
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Before falling, Navitas stock got a huge pop from Nvidia news
Navitas stock skyrocketed on Wednesday following news that Nvidia was featuring the company's 800 V-to-6 V DC-DC power delivery board (PDB) at the Computex 2026 conference. The PDB board was showcased as part of Nvidia's AI Factory MGX platform, and Navitas's share price soared following news that the company's tech partnership was being highlighted. On the other hand, the stock suffered big sell-offs later in the week and closed out the stretch solidly in the red.
A strong jobs report has the market worried
The Federal Reserve is tasked with shaping monetary policy that both promotes economic growth and keeps inflation under control, and setting benchmark interest rates is arguably the most important tool at its disposal. Lower interest rates help energize economic growth, while higher rates help curb inflation.
With the May jobs report published on Friday, the BLS estimated that 172,000 nonfarm payroll positions had been added last month -- more than double the 80,000 estimated job additions called for by surveyed economists. Strong jobs growth could cause the Fed to once again shift its priorities to curtailing inflation, which has been accelerating recently. If the Fed raises rates, it could curb investors' appetites for Navitas and other growth stocks and set the stage for further valuation contractions.
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.
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