Wolfspeed Stock Defies Bearish Bets with Fundamental Strengths

Wolfspeed shares demonstrated notable resilience at the close of last week, maintaining stability in the face of a significant surge in bearish options trading. As the new week begins, this technical picture intersects with fresh supportive fundamentals: a substantial tax refund and confirmed backing for the company's leadership.

The current market activity follows an event-packed December for the silicon carbide specialist. Recent options flow contrasts sharply with two clearly positive developments:

• Substantial Non-Dilutive Liquidity: Early in December, Wolfspeed confirmed the receipt of a $698.6 million tax refund under the CHIPS and Science Act (Section 48D). This cash infusion directly strengthens the balance sheet and addresses core investor concerns regarding the financing of its planned capacity expansions.
• Strategic Automotive Partnership: On December 9, the company announced a supply agreement to provide silicon carbide power modules for future electric vehicle platforms from Toyota. This partnership grants Wolfspeed's technology additional momentum within the highly competitive automotive sector.

This combination of enhanced liquidity and a flagship industrial customer markedly improves the company's position for its next phase of growth.

Divergence Between Options and Equity Price

A striking discrepancy emerged on Friday between derivative markets and the share price. Data from MarketBeat indicated that approximately 283,920 put options on Wolfspeed were traded—a figure roughly 80% higher than average. Such a spike is typically interpreted as a bearish signal, suggesting traders are either hedging against or speculating on a potential decline in the stock's value.

Despite this positioning, the equity itself advanced, closing at $18.37 after reaching an intraday high of $18.95. The market's ability to absorb this heavy put volume points to underlying demand in the spot market.

Should investors sell immediately? Or is it worth buying Wolfspeed?

Shareholder and Management Alignment

The recent price stability coincides with the results of the Annual Meeting of Stockholders held on December 16. Shareholders approved all key proposals, including the election of seven board director nominees and the company's executive compensation plan.

Reports indicate that Wolfspeed has adjusted the compensation structure for CEO Robert Feurle. This move is viewed as an endorsement, signaling the board's support for the strategic direction of the ongoing corporate turnaround.

Technical Outlook and Market Sentiment

Entering the shortened holiday week, the stock is at a technical inflection point. It has so far defended the $18.00 level, which has established itself as a near-term support zone.

• Analyst Perspectives: Despite operational progress, Wall Street maintains a cautious stance. The current consensus rating stands at "Reduce," with average price targets situated below the present trading level. This creates a tension between skeptical analyst sentiment and the recent positive corporate developments.
• Catalysts Ahead: The market's focus will center on whether the substantial put positions established on Friday are quickly unwound or represent bets on post-holiday weakness. Furthermore, the deployment of the approximately $700 million in cash and the execution of the new CEO's strategy will move to the forefront.

For now, Wolfspeed has managed to decouple its share price from short-term bearish speculation. The trajectory into 2026 will likely be determined by how efficiently the company utilizes its fresh liquidity and advances its contracted projects within the automotive industry.