Wolfspeed has 'compelling narrative, but it's 'show-me' story, Morgan Stanley says
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Investment firm Morgan Stanley said on Monday that Durham, North Carolina-based Wolfspeed (NYSE:WOLF) has a "compelling narrative," but it has become a "show-me" story due to issues surrounding its revenue and gross margins.
Analyst Joseph Moore said that sentiment on Wolfspeed could change if the company could put forth a couple of quarters if the company could show "consistent improvement."

"Optimists are highlighting that the company does not need to draw down the most expensive debt opportunities, given opportunities for government funding through the CHIPS Act, as well as the substantial Renesas prepayment," Moore wrote in an investor note. "The company is expressing confidence with funding for the original plan of $6.5[B] of capital spending between now and [calendar 2027], given $5[B] of capital secured in the last 10 months."
Moore added that better revenue figures from competitors such as OnSemi (ON) have raised "material" fundamental questions, and Wolfspeed (WOLF) has to demonstrate to investors that it can make investors feel better about it.
Wolfspeed (WOLF) shares rose 5.8% in mid-day trading on Monday.


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