6 power chip stocks are surging as AI demands more energy

Power semiconductor stocks are rallying sharply, becoming the latest sector to capture investor attention in the expanding artificial intelligence narrative, following surges in memory and optical networking components. Shares of Navitas Semiconductor (NVTS) have gained 49% in just five sessions, while competitor Vicor (VICR) has jumped 27% over the same period, as the market zeroes in on the critical challenge of powering next-generation AI hardware.

The rally extends across the sector, driven by the increasing energy demands of AI data centers that now consume electricity on the scale of small cities. "Navitas 2.0 targets a $3.5 billion serviceable available market by 2030," company management stated, highlighting a strategic pivot to high-power applications for AI, which became the majority of its revenue for the first time.

In recent trading, multiple power-chip stocks saw significant gains. Beyond Navitas and Vicor, Wolfspeed (WOLF) climbed 6.3%, Alpha & Omega Semiconductor (AOSL) gained 4.7%, and Power Integrations (POWI) rose 3.9%, according to Barron's. The focus has intensified on companies using wide-bandgap materials like gallium nitride (GaN) and silicon carbide (SiC), which offer higher efficiency and better thermal performance than traditional silicon, a crucial factor in densely packed AI servers.

This emerging sector addresses a fundamental bottleneck in the AI build-out: delivering massive amounts of electricity to power-hungry GPUs without excessive energy loss or heat generation. While Nvidia (NVDA) dominates the AI accelerator market, its next-generation systems require advanced power solutions, creating a vital sub-market for specialized suppliers.

Navitas Pivots to High-Power AI

Navitas Semiconductor has become a key example of this trend, with its stock rising more than 750% over the past year. The company is deliberately moving away from low-margin mobile chargers to focus on high-power data center applications. Full-year 2025 revenue was $45.92 million, down 45% from the prior year due to this transition, but the company guided for sequential growth in the first quarter of 2026.

The company's work with Nvidia has been a significant driver of investor interest. Navitas unveiled an 800-volt DC-DC GaNFast power delivery board specifically for Nvidia’s next-generation AI architectures, positioning itself as a direct enabler of future AI factories. This contrasts with the broader, foundational role of manufacturers like Taiwan Semiconductor Manufacturing (TSM), which controls over 90% of leading-edge chip production for companies including Nvidia and AMD.

An Overheated Rally?

Despite the compelling growth story, the recent rally has pushed valuations to extreme levels. Navitas, with a market cap near $3 billion, trades at roughly 62 times its trailing-twelve-month revenue. The stock has run far ahead of Wall Street’s consensus price target of around $7, with most analysts maintaining a Hold rating, according to 24/7 Wall St.

While the long-term thesis of powering AI infrastructure is strong, the shares appear to have priced in several years of optimism. Investors are now watching to see if upcoming earnings can validate the sequential growth story and justify the stock's 784% run over the past year. The risk of volatility remains high for a company still posting operating losses while competing against larger, established players like ON Semiconductor and Wolfspeed.

This article is for informational purposes only and does not constitute investment advice.