Despite announcing a promising strategic partnership earlier in the week, Wolfspeed’s stock experienced a sharp decline during Tuesday’s trading session. A surge in bearish options trading overshadowed the company’s recent operational developments, driving the share price down by more than 5%.
The equity dropped as much as 5.23% intraday, falling $0.94 to approximately $16.95. This downward movement was primarily fueled by significant bearish options flow, with put options substantially outpacing call options in trading volume. The put-call ratio reached 1.9, indicating nearly twice as many bearish bets as bullish positions.
Strategic Partnership Fails to Impress Market
On Monday, Wolfspeed had revealed a new collaboration with Hopewind, a leading provider of wind power converters. The partnership involves integrating Wolfspeed’s 2.3kV silicon carbide LM Pack module into Hopewind’s next-generation wind power converters, a development expected to boost power density by up to 38% while enhancing efficiency and reliability.
The new module is projected to become commercially available in early 2026, representing a significant advancement for Wolfspeed’s renewable energy technology. However, financial markets completely disregarded this fundamentally positive development.
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Post-Bankruptcy Recovery Faces Challenges
The current volatility must be viewed within the context of Wolfspeed’s recent restructuring. The company emerged from Chapter 11 bankruptcy protection in late September 2025 with approximately 70% reduced debt. Following its exit from bankruptcy proceedings, the stock skyrocketed by over 3,000%, though it subsequently surrendered nearly half of those gains.
The prevailing bearish sentiment largely stems from disappointing financial guidance issued on October 29, 2025. For the second fiscal quarter of 2026, Wolfspeed projected revenues between $150 million and $190 million, falling considerably short of analyst expectations. Company management attributed this forecast to persistent market weakness and customer defections to alternative suppliers during the bankruptcy period.
Technical Support Level Tested
From a technical perspective, the recent selloff has pushed Wolfspeed shares toward crucial support around the 50-day moving average. A decisive break below this level could signal further declines ahead. Investment analysts remain divided between buy and sell recommendations, reflecting the high-risk, high-reward nature of this corporate turnaround story.
Investors await the next significant catalyst: the Q2 2026 earnings report scheduled for release in late January or early February 2026. This financial update will need to demonstrate whether the company’s post-restructuring strategy is finally translating into improved financial performance.
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