Why Navitas Semiconductor Stock Is Up Today

Shares of Navitas Semiconductor (NVTS +1.72%) rose on Tuesday after the designer of next-generation power chips struck a deal to acquire Claros, a provider of innovative energy management solutions for artificial intelligence (AI) data centers.

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Terms of the deal

Navitas is offering to purchase Claros for up to $232.8 million, with $216 million paid at closing in cash and stock, and the remainder paid if certain business milestones are achieved.

Today’s Change

(1.72%) $0.21

Current Price

$12.44

Key Data Points

Market Cap

$3.2BMarket cap calculated using publicly traded shares outstanding only. Does not include unlisted, private, or dual-class non-traded shares. Implied market cap may vary.

Day’s Range

$12.37 – $13.44

52wk Range

$5.44 – $34.17

Volume

17.8M

Avg Vol

21.4M

Gross Margin

-1371.01%

Breaking through the power wall

The most advanced AI chips are so powerful that traditional energy delivery systems can’t keep up. These ultra-high-performance chips require massive amounts of electricity and near-instant response times.

“The future of AI depends on delivering thousands of amps to increasingly power-hungry processors with unprecedented speed and precision,” Navitas CEO Chris Allexandre said.

Claros stacks multiple power technologies into a single, compact package and places it closer to AI chips. In turn, the power they require needs to travel only millimeters instead of inches.

That might not sound like much of a difference, but it’s enough to slash response times and heat production, while boosting efficiency and power density, thereby significantly reducing the costs of operating an AI data center.

Navitas estimates that acquiring Claros will more than double its addressable market to over $8 billion. The deal is projected to close by the end of the year, subject to regulatory approval.