SolarEdge: A Shelved Project Reborn as the Data Center's Killer App — and a Solar Recovery Nobody Saw Coming
TD Cowen 54th Annual Technology Conference, May 28, 2026 — CEO Shuki Nir lays out the SST roadmap and a Europe-led solar inflection
SolarEdge Technologies entered the TD Cowen conference with a stock that has already had a strong two-week run, but CEO Yehoshua "Shuki" Nir used the session to fill in details that go well beyond what the market has been pricing in. The two biggest revelations: a solid-state transformer for AI data centers that was quietly in development five years ago and has now been resurrected with meaningful technical advantages over newer entrants, and a European solar recovery in residential and commercial that management says is running above seasonal norms and has continued through May.
The Solid-State Transformer Story Is Older — and More Advanced — Than the Market Realizes
The single most important disclosure from the session is that SolarEdge's data center SST is not a whitepaper concept. The company began developing a solid-state transformer roughly five or six years ago, originally targeting utility-scale solar. Engineers spent three years building out the lab infrastructure, test facilities, and intellectual property before the project was shelved in 2024 during SolarEdge's well-documented financial difficulties. When NVIDIA published its white paper in 2025 outlining the industry's expected transition to 800-volt DC infrastructure in AI data centers, management recognized the architecture it had already built was directly applicable and revived the program, including rehiring engineers who had left the company when it was closed down.
"We basically brought this project back to life," Nir told TD Cowen analyst Jeff Osborne. "We have all the building blocks already and now we are putting them together." The practical consequence is that SolarEdge is claiming 99% efficiency on its SST at a time when Nir says competing solutions are coming in lower, and he attributes that gap directly to the single-conversion architecture the company has developed. "The expectation is to go in one step from 34.5 kilovolt down to 800-volt DC," he said, implying that peers relying on intermediate voltage steps — 10kV or 15kV — are architecturally disadvantaged from the outset.
The product itself is designed as a 20-foot container housing 30 modular cells that together deliver 5 megawatts, with redundancy built into the unit. SolarEdge is targeting a working product in its own labs in 2026, pilot installations in 2027, and commercial-scale deployment aligned with NVIDIA's GPU roadmap transition to 800-volt requirements in 2028. Infineon, a long-standing SolarEdge silicon carbide supplier, is named as the key semiconductor partner for the SST.
Go-To-Market Is Narrow but Well-Engaged
Nir is unusually specific about how SolarEdge is approaching the data center market. He notes the customer universe is small — fewer than 20 meaningful companies across hyperscalers and neoclouds — and says SolarEdge has already engaged with most of them. Critically, those conversations are technical, not commercial. Customers are stress-testing architecture and reliability claims rather than negotiating pricing or volumes. "They want to make sure that the solution they choose and pick is something that is reliable, does what it promises to do, and delivers on time," Nir said.
The company is explicitly not committing to an exclusive channel strategy. It is in parallel discussions with direct data center customers and with incumbent power electronics providers who may find it more efficient to partner with SolarEdge than to continue developing competing solutions internally. The TAM question — whether redundancy requirements and on-site generation proliferation could expand the addressable market beyond the nameplate data center capacity figure — is one SolarEdge acknowledges but is not yet publicly sizing. An Analyst Day later in 2026 is expected to provide more financial framing around the SST opportunity.
European Solar Is Running Hot — and It's Not Just Seasonality
On the core solar business, Nir draws a clear contrast between Europe and the United States. He says the European residential and commercial and industrial markets began showing above-seasonal demand starting in March, driven by heightened awareness of energy costs and grid dependency concerns following the geopolitical environment. That momentum carried through April and, based on early checks, into May as well. The significance is not subtle: management is describing a demand inflection in Europe that is real-time and ongoing, not a forecast.
The U.S. picture is more complicated. Commercial and industrial is described as performing well, with SolarEdge benefiting structurally from a competitive landscape where its two main rivals — Chint and SMA — lack domestic content compliance, and Chint faces FEOC exposure on top of that. The 40% tax benefit available to customers using FEOC-compliant, domestically manufactured equipment is producing what Nir calls "a structural shift of market share towards SolarEdge," a trend he says has been visible for two to three quarters and is expected to continue.
Residential in the U.S. remains the soft spot. TPO investment has contracted, and Nir is candid that the bottom will be defined by when that investment cycle turns rather than by any organic consumer demand signal. However, he points to safe harbor activity — which SolarEdge has been executing on both the TPO and C&I sides through July 3 — as providing materially better revenue visibility than the company had in prior cycles. Unlike the pre-2024 period, the company now has multi-year demand commitments embedded in safe harbor arrangements, even if the pull-through timing remains customer-dependent.
Nexus Is the Margin Story for the Next Four Quarters
The Nexus platform — SolarEdge's redesigned residential inverter and storage system — is the operational lever that ties together the cost, manufacturing, and competitive narrative for the solar business. Launched in Germany in March to what Nir describes as an unexpectedly enthusiastic installer response, the entire Q2 European supply allocation is already sold out with Q3 bookings accumulating. U.S. pilot installations have been underway, and a broader domestic rollout is targeted for Q3 2026, with full transition to the Nexus platform expected by the end of Q1 2027.
Three distinct margin tailwinds converge on Nexus. First, all Nexus inverters and optimizers are manufactured in the United States, making them eligible for the 45X production tax credit, which reduces net cost. Second, Nexus is inherently lower cost than the previous platform on an apples-to-apples comparison. Third, the shift of the battery portfolio entirely to LFP cells — away from the expensive NMC Samsung cell contracts that have weighed on margins — is embedded in the Nexus design. Nir also suggests the enhanced homeowner value proposition gives SolarEdge incremental pricing power. The single-SKU simplification that comes with the Nexus transition carries additional operational benefits: fewer products to manage, develop, and fulfill across the supply chain.
On the OpEx side, management declined to provide forward guidance but signaled that operational efficiency work is ongoing, and that SKU rationalization should yield further savings. A headwind from Israeli shekel appreciation versus the dollar is adding several million dollars to the OpEx line, which partially offsets those gains.
Chinese Inverter Policy in Europe Is Real but Contained — For Now
Nir addressed the emerging regulatory risk around Chinese inverter manufacturers in Europe with a notably measured tone. The only binding decision so far is a directive barring the use of Chinese inverters on projects financed by European governmental banks — which he characterizes as "a very, very small fraction of the market." Country-level bans remain hypothetical, and Nir acknowledged the political complexity: Chinese inverters currently account for the majority of the European market, creating a genuine dependency that makes aggressive regulatory action difficult. His core message to investors is that SolarEdge is positioned to gain share in Europe on the merits of Nexus regardless of how the policy debate resolves.
The broader framing Nir left with the audience is of a company that has used 2025 as a stabilization year and is now entering a phase where its core solar and storage business is recovering while a genuinely new and potentially large opportunity in data center power infrastructure sits on top of it. Whether the SST opportunity is as large and as proximate as the stock's recent move implies remains to be demonstrated, but the technical pedigree is more substantive than a whitepaper, and the commercial engagement with hyperscalers is already underway.