Why Navitas Semiconductor Stock Is Plummeting Today

Key Points

• Navitas stock is falling today following news that the Trump administration has made concessions to help advance trade negotiations with China.

• A trade deal between the U.S. and China could mean that Navitas faces more competition in its key product categories.

• The outlook on U.S. interest rate policy is also pushing Navitas stock lower today.

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Navitas Semiconductor (NASDAQ: NVTS) stock is deep in the red Tuesday. The company's share price was down 9.1% as of 3 p.m. ET. Meanwhile, the S&P 500 (SNPINDEX: ^GSPC) was down 0.3%, and the Nasdaq Composite (NASDAQINDEX: ^IXIC) had slipped 0.2%. Navitas shares had been down as much as 12% early in trading.

Navitas is falling today due to news that the Trump administration has taken a big step to secure a trade deal with China. The company's share price is also under pressure due to investors betting that a cut in interest rates this week is no longer in the cards.

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Navitas stock slips on trade news

The Trump administration has lifted licensing requirements that prevented artificial intelligence (AI) chips and semiconductor manufacturing hardware from being exported to China. The administration has made the move in hopes of advancing a new trade deal between the countries, and securing access to Chinese rare earth minerals appears to be central to the U.S.'s aims in the trade negotiations.

Navitas specializes in gallium nitride (GaN) power chips and silicon carbide (SiC) technologies, and a trade deal between the U.S. and China could potentially result in softer performance for the company. Competition from Chinese GaN and SiC providers is a significant risk factor for Navitas, and a trade agreement could increase pressures from foreign rivals.

What does interest rate policy mean for Navitas stock?

While the stock is getting hit with big sell-offs in today's trading, Navitas's share price is still up roughly 118% across 2025's trading. The company's partnership with Nvidia has played a big role in the gains, but expectations that the Federal Reserve will cut interest rates multiple times this year have also been a key catalyst. Reports now suggest that the Fed is unlikely to lower interest rates at its meeting this week, and cautious commentary about the potential for future rate cuts could put more pressure on Navitas stock in the near term.

Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.