Shares of SolarEdge Technologies (NASDAQ:SEDG) jumped 24.8% in January, according to data provided by S&P Global Market Intelligence, as solar stocks rose and the company made moves that could broaden its market reach.
SolarEdge announced and completed the acquisition of a 57% stake in S.M.R.E. Spa, an integrated powertrain technology company for electric vehicles. The acquisition cost $85 million and is expected to get the company into component design and manufacturing for electric vehicles. Over time, SolarEdge intends to acquire the rest of the company through open market purchases.
Management also announced that SolarEdge’s EV charging solar inverter can now be controlled using Google Assistant. The hope is to make smart EV charging an integrated feature for homeowners with solar.
SolarEdge clearly isn’t satisfied being a component supplier in the solar market, since it’s trying to spread its wings into other markets as well. The electric-vehicle market may be a bit of a reach for a company that started in solar, but the charger is the component that ties everything together. If SolarEdge an integrate its chargers with EVs that have S.M.R.E.’s technology, it could create a technology ecosystem that drives long-term growth. There’s a long way to go in an effort to build that integration, but SolarEdge’s management clearly has big dreams ahead and the market was buying into them in January.
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Travis Hoium has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A shares) and Alphabet (C shares). The Motley Fool has a disclosure policy.