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Can SEDG Capitalize on the Growing AI Data Center Power Market?

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Key Takeaways

  • SolarEdge is developing 800 VDC technology for AI data center power delivery and protection.
  • Its NVIDIA collaboration could support development of next-generation data center power systems.
  • SolarEdge trades at 1.35X forward sales, below the industry's 1.84X, after shares fell 41.7% in three months.

SolarEdge Technologies (SEDG - Free Report) is expanding its power-electronics expertise into artificial intelligence (AI) data center infrastructure with its developing MVAC-to-800 VDC technology. Showcased at the NVIDIA AI Factory MGX Ecosystem Showcase, the technology aims to improve power delivery, distribution and protection for next-generation AI computing systems.

AI workloads are increasing data centers’ power requirements, creating demand for efficient conversion, distribution and protection systems. SolarEdge Technologies’ developing 800 VDC architecture could help the company diversify beyond its established solar and energy-management markets.

Its collaboration with NVIDIA and participation in the Open Compute Project ecosystem may provide opportunities to engage with industry stakeholders evaluating future power architectures. However, commercial success will depend on system validation, customer adoption and the pace of 800 VDC deployment.

Higher-voltage DC architectures are being explored to support the growing power density of AI computing racks and simplify power delivery. SolarEdge Technologies’ proposed system combines medium-voltage AC conversion with DC distribution, monitoring and protection.

The technology must still demonstrate reliability, safety, cost-effectiveness and compatibility with data center requirements. Its commercial opportunity will depend on whether operators adopt these architectures at scale.

SolarEdge Technologies’ AI data center initiative represents a potential new growth avenue as the company applies its power-electronics capabilities to an emerging infrastructure market. Its work with NVIDIA and the broader OCP ecosystem may help advance the industry’s understanding of 800 VDC distribution and the protection requirements needed for deployment.

Which Solar Companies Could Benefit?

Along with SEDG, other solar companies are also poised to benefit from the same trend, as discussed below:

Enphase Energy (ENPH - Free Report) : Enphase is developing its IQ Solid-State Transformer to convert medium-voltage AC power directly to 800 VDC for AI data centers. Its power modules are being built in the United States for full-scale system validation, providing potential exposure to next-generation data center power infrastructure.

First Solar, Inc. (FSLR - Free Report) : The company manufactures thin-film solar modules for utility-scale projects. Rising electricity demand from AI data centers could support demand for additional solar generation capacity, as data center operators and utilities explore ways to secure more electricity.

SEDG’s Earnings Estimates

The Zacks Consensus Estimate for 2026 and 2027 earnings per share (EPS) indicates an increase of 87.39% and 351.5%, respectively, year over year.

 

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SEDG Stock Trading at a Discount

SEDG is trading at a discount relative to the industry, with a forward 12-month price-to-sales of 1.35X compared with the industry average of 1.84X.

 

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SEDG Stock Price Performance

In the past three months, the company’s shares have lost 41.7% compared with the industry’s 22.5% decline.

 

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SEDG’s Zacks Rank

The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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