SolarEdge shares jump on Infineon partnership to develop AI data center transformers
Shares of the Israeli renewable energy company surged by over 25% on Nasdaq following the announcement. The company’s stock is up more than 175% so far this year.
SolarEdge, the Israeli renewable energy company, announced a collaboration with Germany’s Infineon Technologies to develop a specialized transformer for server farms, marking its first entry into the rapidly growing data center sector. Shares of SolarEdge surged by over 25% on Nasdaq following the announcement. The company’s stock is up around 175% so far this year.
Global electricity demand has surged in recent years, driven by the rise of electric vehicles and the AI revolution. Server farms, critical to powering AI systems, consume vast amounts of electricity, contributing significantly to the growth in global power usage, particularly in the United States.
SolarEdge’s advantage in developing the new transformer lies in its expertise in voltage conversion, a process similar to converting power from solar panels to the grid, or from the grid to data centers. The company plans to develop and test the new transformer using its existing infrastructure and laboratories in Israel.
According to the International Energy Agency, data centers accounted for 1.5% of global electricity consumption in 2024, a figure expected to rise sharply in the coming years due to expanding AI workloads.
Earlier in the day, SolarEdge released its third-quarter financial results, reporting an 18% increase in revenue to $340 million, and a reduction in quarterly losses to $35 million, compared to a $115 million loss in the same quarter last year.
Despite the improvement, the company’s shares fell by more than 11% in pre-market trading following its earnings release, before recovering after the partnership news broke. Investor concern stemmed from lower-than-expected guidance for the fourth quarter, with projected revenue in the range of $310–340 million, below analysts’ average forecast of $343 million.
