Why Wolfspeed Stock Crashed Today

Wolfspeed (WOLF) crashed 16.41% after fiscal Q4 2026 earnings revealed losses four times worse than Wall Street expected. The company reported a loss of $2.26 per share on revenue of $149.6 million, down 24% year-over-year, with gross margins at negative 25%.

The quarterly miss signals deepening operational challenges despite one bright spot: AI data center revenue doubled year-over-year. However, management's Q1 2027 guidance of approximately $150 million in revenue indicates growth has stalled at current levels. Analysts now project continued revenue declines in coming quarters.

The negative gross margin is particularly concerning for traders, indicating Wolfspeed is losing money on every unit sold before accounting for operating expenses. The sequential flatness implied by Q1 guidance suggests the company has yet to find a path to stabilization despite exposure to high-growth AI infrastructure demand.