Why Did Navitas Semiconductor Explode Higher Today?

Key Points

• Navitas announced its earnings release date today.

• Also today, an analyst upgraded Texas Instruments stock to neutral, saying the economy looks steady and chip inventories "may start to improve."

• Investors may have decided that good news for TI is even better news for Navitas.

• 10 stocks we like better than Navitas Semiconductor ›

A funny thing happened to Navitas Semiconductor (NASDAQ: NVTS) stock this morning: Shares of the power management semiconductor specialist exploded 28.5% higher through 9:50 a.m. ET after announcing its earnings report date: Aug. 4.

Read that again. Navitas stock jumped after saying that it would report earnings on Aug. 4, not what it would report. Yet despite not knowing whether next month's earnings news will be good or bad, investors are buying the stock hand over fist.

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What will Navitas report for earnings?

Is the announcement of an earnings release date the only reason Navitas stock soared today? Perhaps not. There could be rumors out there, floating around on Wall Street, of which I'm unaware. For example, most analysts have Navitas pegged for a $0.05 per-share loss in its Q2 report, and perhaps news has filtered out that Navitas will do better than that.

One clue that might help: Seaport Global Securities upgraded Navitas's larger rival, Texas Instruments (NASDAQ: TXN), which is also involved in power management chips. In a note covered on StreetInsider.com, Seaport analyst Jay Goldberg commented: "We thought the analog inventory cycle was not going to improve, and the macroeconomy was slowing. We were wrong. While we see no strong catalysts, it now appears conditions will not deteriorate, and inventories may start to improve."

Is Navitas stock a buy?

Investors might be taking those comments and running with them, assuming that if Seaport is no longer a sell, then maybe Navitas stock is worth buying. If that's the case, though, they might want to rethink.

Navitas lost money in four of the past five years, and analysts polled by S&P Global Market Intelligence see Navitas losing money for the next four years as well. Navitas still looks like a sell to me.

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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Texas Instruments. The Motley Fool has a disclosure policy.