Shares of Wolfspeed Inc. (WOLF) are plummeting 18.51% in pre-market trading on Friday following the release of disappointing third-quarter results and a weak long-term outlook. The silicon carbide chipmaker's performance has raised concerns among investors about its growth prospects and profitability.

Wolfspeed reported Q3 revenue of $185.4 million, missing analyst estimates of $185.9 million and representing a 7.62% decrease from the same period last year. Despite beating expectations with an adjusted loss per share of $0.72, the company's bottom line raised serious concerns. Wolfspeed reported a staggering net loss of $285.5 million for the quarter, with an adjusted gross margin of merely 2%, indicating significant pressure on the company's profitability.

Adding to investor worries, Wolfspeed forecasted 2026 revenue of $850 million, well below analysts' estimates of $958.7 million. The company cited slower-than-expected EV adoption and broader macroeconomic challenges as key factors impacting demand for its silicon carbide chips. These headwinds, combined with high interest rates and rising capital costs, have led to delayed product launches by customers and weakened order activity in the industrial and energy sectors. The uncertain future of federal funding under the CHIPS Act for Wolfspeed's North Carolina plant has further complicated the company's growth prospects, contributing to the sharp decline in investor confidence.