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Why Wolfspeed Stock Plummeted 84.7% in 2024 and Is Sinking Even Further in 2025

Source The Motley Fool

Wolfspeed (NYSE: WOLF) stock got crushed in 2024 despite a bullish backdrop for the broader market. The silicon-carbide technology specialist's share price fell 84.7% across last year's trading, according to data from S&P Global Market Intelligence. Meanwhile, the S&P 500 index climbed 23.3%, and the Nasdaq Composite index rose 28.6%.

WOLF Chart

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WOLF data by YCharts

Despite a bullish backdrop for the broader semiconductor industry, Wolfspeed stock saw huge selloffs last year as the business continued to post big losses. In addition to mounting losses, the company's path to profitability was called into question by closing production facilities and abandoning plans to build new plants.

Wolfspeed stock crumbled in 2024

Last year was a tough stretch for Wolfpseed. As of the company's most recent quarterly update, the business had lost more than $750 million over the trailing-12-month period. Wolfspeed closed out its last reported quarter with roughly $3 billion in long-term debt and $3.1 billion in long-term liabilities.

Wolfspeed's losses and margin problems took on added significance in conjunction with canceled business scaling projects that were intended to boost sales and earnings over the long term. In August, news hit that Wolfspeed would be closing one of its production facilities in Durham, North Carolina. In October, it was announced that the company was abandoning plans to build a $3 billion plant in Germany. The company also announced that it was closing a facility in Texas.

News hit in November that Woflspeed CEO Gregg Lowe was resigning from his position and that the company was in the process of finding a new leadership team. The stock actually saw gains in conjunction with the leadership shakeup, but it still closed out the year with massive losses.

Why is Wolfspeed stock still plummeting in 2025?

Wolfspeed stock has continued to see big selloffs early in 2025's trading. The company's share price is down roughly 26% year to date as of this writing. These selloffs have occurred amid the backdrop of a 0.8% decline for the S&P 500 index and a 1.2% pullback for the Nasdaq Composite index.

While there hasn't been any major business-specific news pushing the company's share price lower, Wolfspeed has seen its big valuation pullback continue in conjunction with macroeconomic pressures and geopolitical dynamics. The latest data from the Bureau of Labor Statistics showed that the U.S. economy added far more jobs in December than economists had expected, which raised concerns that inflationary pressures may be on the rise again.

Adding another bearish catalyst for the stock, the Biden administration recently unveiled a sweeping series of regulations that will limit the export of AI chips to China, Russia, Iran, and North Korea. While these restrictions are unlikely to directly affect Wolfspeed, they have caused investors to take a more risk-averse approach to the stock market at large.

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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.

Disclaimer: For information purposes only. Past performance is not indicative of future results.

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