What Happened?

Shares of solar power systems company SolarEdge (NASDAQ: SEDG) fell 6.2% in the afternoon session after markets reacted to news that a new domestic policy bill will 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.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. 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 98 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.

SolarEdge is up 68.9% since the beginning of the year, but at $25.00 per share, it is still trading 21% below its 52-week high of $31.65 from July 2024. Investors who bought $1,000 worth of SolarEdge’s shares 5 years ago would now be looking at an investment worth $158.28.

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