What Happened?
Shares of solar power systems company SolarEdge (NASDAQ: SEDG) jumped 4.3% in the morning session after analysts at Barclays upgraded the stock and more than doubled their price target on the stock.
The investment bank lifted its rating on the solar energy technology firm to "Equal-Weight" from a previous "Underweight" status. In a significant show of increased confidence, Barclays analyst Christine Cho also raised the price target for SolarEdge to $29 from $12, a 141% increase.
This type of rating change suggests the analyst's outlook on the company has improved significantly. The upgrade is reportedly tied to expectations of a revenue turnaround after a prolonged period of declines, with Barclays forecasting substantial annual top-line growth for 2025 and 2026. This optimism is driven by the normalization of inventory in European sales channels and anticipated market share gains in both the U.S. and Europe.
After the initial pop the shares cooled down to $25.95, up 1.2% from previous close.
Is now the time to buy SolarEdge? Access our full analysis report here, it’s free.
What Is The Market Telling Us
SolarEdge’s shares are extremely volatile and have had 96 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 6 days ago, when the stock dropped 6.2% after markets reacted to news that a new domestic policy bill would end key subsidies for the clean energy sector and could raise costs for solar imports from Asia.
The potential end to key subsidies and the threat of increased tariffs on solar components imported from Asia are casting a shadow over the company's future profitability. This development adds to the headwinds faced by the solar industry, which has been grappling with volatile market conditions and high inventory levels at distributors.
SolarEdge is up 75.3% since the beginning of the year, but at $25.95 per share, it is still trading 14.1% below its 52-week high of $30.20 from July 2024. Investors who bought $1,000 worth of SolarEdge’s shares 5 years ago would now be looking at an investment worth $154.28.
Unless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) semiconductor stock benefiting from the rise of AI. Click here to access our free report on our favorite semiconductor growth story.
