Shares of solar power systems company SolarEdge (NASDAQ:SEDG) jumped 14.6% in the afternoon session after geopolitical tensions in the Middle East spurred a rally across the industrials sector. Investors are rotating into defense contractors as geopolitical tensions intensify following U.S. and Israeli strikes on Iran.

This has led to a 'risk-off' sentiment in the broader market, where investors pull back from riskier assets. However, defense companies are seeing a surge in interest. For instance, Northrop Grumman, maker of the B-2 stealth bomber reportedly used in the strikes, saw its shares trade higher. Similarly, RTX Corp, the primary contractor for the Patriot missile system, and other major players like Lockheed Martin and BAE Systems also experienced gains. The market anticipates that the deepening conflict will lead to increased government spending on military aircraft, missiles, and surveillance systems, benefiting these companies.

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SolarEdge’s shares are extremely volatile and have had 85 moves greater than 5% over the last year. But moves this big are rare even for SolarEdge and indicate this news significantly impacted the market’s perception of the business.

The previous big move we wrote about was 10 days ago when the stock gained 10% on the news that the company reported strong fourth-quarter results that showed higher revenue and improved margins.

The solar inverter maker announced revenue of $335.36 million, a 71% increase from the same period in the previous year. The company also narrowed its loss after tax by 54% year-over-year to $132.12 million, crediting the performance to operational improvements. Furthermore, SolarEdge provided guidance for positive free cash flow in the first quarter and signaled confidence by aiming to reach profitability later in the year. Following the upbeat report, analysts responded positively, with firms like TD Cowen raising their price targets on the stock due to the margin gains and positive cash flow.

SolarEdge is up 29.9% since the beginning of the year, but at $40.73 per share, it is still trading 10.2% below its 52-week high of $45.38 from November 2025. Investors who bought $1,000 worth of SolarEdge’s shares 5 years ago would now be looking at an investment worth $139.69.

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