In the fast-changing semiconductor industry, two leading companies, namely Navitas Semiconductor and Arm Holdings, are currently competing to gain investor attention, an occurrence that has been occasioned by a game-changer of artificial intelligence in the demand for chips worldwide.
The direction and risk profile of both companies are significantly different, as each has restructured its operations to focus strategically on AI infrastructure.
A Year Of Sharp Moves
By 23 February 2026, the value of the equity of Navitas had increased by around 188% in the last twelve months, much of which may be attributed to investor excitement about its switch to high-power semiconductor solutions for artificial-intelligence data centers and electric-vehicle platforms.
By comparison, Arm shares have a slight year-to-year growth of 13% and a year-on-year decrease of 21%, which reflects the market concerns about its valuation despite its faster growth of AI-related revenues. The position of the most recent trading session is Navitas of 8.11 per share, but this is equivalent to a market capitalization of about $1.9 billion. Meanwhile, Arm was stopped at $123.78, which is equivalent to a market value of about 131 bn.
The risky pivot at Navitas
Navitas has historically focused on gallium-nitride and silicon-carbide power chip designs, which have historically taken a leading role in mobile and consumer electronics designs. The company is now in the process of strategic realignment- named Navitas 2.0- based on high-performance semiconductor applications to AI data-centers and industrial power markets.
However, the transition will have a tightening impact on the short-term revenue levels; the company estimates the revenues of only $7 million in the fourth quarter of 2025, a decrease of $10 and 22 million in the third and fourth quarters, respectively. The projected annual revenue is 36 million dollars, as compared to the 45 million achieved in the last fiscal year. Management contends that partnerships with hyperscale cloud providers, especially Nvidia, will ignite long-term growth. Analysts forecast revenues reaching $130 million by 2028.
Arm’s Data-Center Surge
Arm’s edge lies in CPU design licensing, not silicon wafer production. While its architecture powers about 99% of smartphones, its fastest growth is now in data-center segments. In the Q32026 earnings call, CEO Rene Haas said data centers will soon overtake mobile as the company’s top revenue source.
Royalty income from data-center customers doubled each year. Arm now holds about 50% of the hyperscale market for AI server CPUs, up from 18% in 2024. Consequently, non-mobile applications now generate over half of the company’s revenue.
Outlook For Investors
Navitas offers potential for long-term gains, contingent on a proven revenue turnaround. Arm, even with a high valuation and recent equity buybacks, is actively advancing its AI infrastructure. With a projected median price target of $147.50, Arm stands structurally positioned to capitalize on global AI data-center growth over 2026 and beyond, enhancing its investment appeal.