We show that density-dependent velocity saturation in a GaN High Electron Mobility Transistor (HEMT) can be related to the stimulated emission of longitudinal optical (LO) phonons. As the drift velocity of electrons increases, the drift of the Fermi distribution in reciprocal space produces population inversion and gain for the LO phonons. Once this gain reaches a threshold value, the avalanche-like increase of LO emission causes a rapid loss of electron energy and momentum and leads to drift velocity saturation. Our simple model correctly predicts both the general trend of the saturation velocity decreasing with increasing electron density and the values of saturation velocity measured in our experiments.