SolarEdge Bets on AI Data Centers with New Power Infrastructure Tech
SolarEdge is targeting the AI data center boom with a new Solid State Transformer technology developed in Israel. Despite a weak Q4 forecast and declining solar revenues, the company aims for $600 million in data center infrastructure revenue by 2029.
SolarEdge Technologies is betting on the booming artificial intelligence sector as data centers face a surge in power demand. Traded on Nasdaq under the ticker SEDG and led by CEO Shuki Nir, the renewable energy company is developing a new technology called Solid State Transformer (SST) to convert high-voltage grid electricity into 800-volt direct current. This architecture is specifically designed to meet the next-generation infrastructure needs of AI data centers, aligning with technological directions promoted by Nvidia.
The technology is being developed in Israel, leveraging SolarEdge's core expertise in power conversion and direct current management built over two decades. Unlike its traditional solar offerings, this new product does not depend on photovoltaic panels or solar demand. Instead, it integrates directly into the electrical infrastructure of data centers, where energy consumption is scaling rapidly.
Ambitious Targets and Financial Outlook
SolarEdge has outlined ambitious long-term goals for investors, projecting approximately $600 million in annual revenues from data center power infrastructure by 2029. This is expected to sit alongside $1.8 billion in core solar revenues, meaning the AI infrastructure segment could account for roughly 25% of the company's combined revenues if targets are met.
The strategic pivot comes as SolarEdge navigates a challenging period in its core solar business. The company recently reported mixed third-quarter results for 2026, posting revenues of $326.1 million—a 4.1% decline year-over-year—and an adjusted profit of 29 cents per share. While its accounting net loss narrowed to $8.4 million compared to $50.1 million in the same period last year, markets reacted negatively to weak fourth-quarter guidance projecting revenues between $245 million and $275 million, well below analyst expectations.
Market Hurdles and Future Prospects
Despite the promising growth vector in AI infrastructure, analysts note that the path to commercialization remains long. The SST technology is still in development, and transitioning from laboratory testing to commercial deployments will require strict regulatory compliance and major industry partnerships. Furthermore, SolarEdge will face entrenched competitors in the power infrastructure market.
If successful, however, the Israeli firm could transform from a pure-play solar equipment provider into a significant supplier for the global AI revolution, offering investors a fresh narrative amid ongoing regulatory uncertainties in the US and German solar markets.
