Navitas Semiconductor Corp. (NVTS) is having a rough Wednesday morning. The stock dropped in premarket trading after a key competitor, Wolfspeed Inc. (WOLF), filed a patent infringement lawsuit against the company on Tuesday.

The lawsuit, filed in the U.S. District Court for the District of Delaware, alleges that Navitas infringed five patents related to wide-bandgap semiconductor technology. Wolfspeed said the action is meant to protect its intellectual property portfolio.

According to the complaint, the accused products cover a big chunk of Navitas's lineup: its gallium nitride (GaN)-based FETs—including the GaNFast, GaNSlim, and GaNSafe families—as well as GeneSiC MOSFETs and SiCPAK modules. The specific patents at issue are U.S. Patent Nos. 8,169,005; 10,998,418; 10,886,396; 10,749,443; and 11,888,392.

This is a serious shot across the bow. Wolfspeed is essentially saying that Navitas's core products are built on technology that belongs to them. For a company like Navitas, which makes its living selling GaN and silicon carbide power semiconductors for fast charging, electric vehicles, renewable energy, and industrial applications, that's a direct threat to its bread and butter.

So how is the stock reacting? Not well. Navitas shares were down 6.86% in premarket trading at $13.03, according to market data. The technical picture is already mixed, and this news isn't helping.

Let's look at the charts. Navitas is still in a longer-term uptrend, but the short-term trend is under pressure. The stock is trading 34.8% below its 20-day simple moving average of $19.99 and 38.5% below its 50-day moving average of $21.19. On the bright side, it's still about 5% above its 200-day moving average of $12.41. The MACD indicator is below its signal line with a negative histogram, suggesting bearish momentum is still in control.

Traders are watching support around $12.50. If that level breaks, the stock could fall below its 200-day moving average, opening the door to more losses. On the upside, reclaiming the 100-day moving average near $15.48 would be a sign of improving momentum.

Navitas's next big catalyst is its earnings report, scheduled for July 27. Analysts expect a loss of 5 cents per share on revenue of $9.97 million, down from $14.49 million in the same quarter last year. Wall Street still has a Buy consensus on the stock, with an average price target of $18. Recent analyst moves include Rosenblatt raising its target to $13 (Neutral), Needham to $21 (Buy), and Baird to $20 (Outperform).

For now, the patent lawsuit adds a layer of uncertainty. Investors will be watching to see how Navitas responds and whether this legal battle escalates. The company's core technology is at the heart of its business, and any disruption there could have real consequences.