Small caps last week: SolarEdge guidance, Bitdeer contract, Replimune nears approval

Last week, an FDA advisory panel backed the efficacy of small-cap biotech Replimune Group’s experimental melanoma treatment, while solar equipment maker SolarEdge flagged potential weak third-quarter revenue amid slowing demand. Elsewhere, cloud start-up Volta agreed to lease data center capacity from bitcoin miner Bitdeer Technologies for Anthropic, based on Bloomberg reporting. Oninvest recaps these and other stories from the week of August 3-7.

Bitdeer Technologies has signed a 16-year, $4.7 billion contract with cloud start-up Volta Infrastructure to lease capacity at a data center under construction in Norway. Bloomberg reported that the capacity is intended for Anthropic. With a potential eight-year extension, the value of the deal could rise to $8 billion. Volta’s investors include Nvidia and the family office of Michael Dell.

During trading on Tuesday, Bitdeer shares climbed around 14% before giving up those gains to close roughly flat at $11.38 apiece. The stock has 11 “buy” calls from Wall Street versus one “hold” rating. The average target price is $22.70 per share, implying around 110% upside from the latest closing price.

Growing demand for AI is intensifying the shortage of computing capacity: Anthropic is signing agreements to lease such capacity, including with SpaceX, and is in talks with Meta. Bloomberg notes that competition for AI infrastructure is increasing and that building it requires enormous investments.

SolarEdge shares plunged 30.5% on Wednesday to $33.90 apiece, their lowest level since mid-March. The company now guides for third-quarter revenue of $310-340 million, versus the average analyst estimate of $365 million. The lower end of the guided range implies a sales decline of around 9% year over year, said to be due to a seasonal weakening of demand in Europe and weak sales in the U.S.

SolarEdge nevertheless posted notably better second-quarter results: revenue rose 20% year over year to $346.2 million, while the net loss narrowed fourfold to $30 million. The company also generated a non-GAAP operating profit for the first time since 2023.

SolarEdge has 19 “hold” ratings versus seven “sell” recommendations and only one “buy” call. The average target price is $36.10 per share, implying around 17% upside from the Friday close.

An FDA advisory committee has backed the efficacy of Replimune Group’s experimental melanoma treatment, increasing the biotech’s chances of securing approval. The regulator had previously rejected the company’s application for accelerated approval twice. Against this backdrop, shares of the small-cap biotech soared 107% on July 31.

Replimune has spent more than a year seeking approval for its experimental melanoma treatment for patients whose disease has progressed following previous therapy. The treatment, which is based on a modified herpes virus, is injected directly into tumors and used in combination with a Bristol Myers Squibb drug.

Replimune has six Wall Street ratings, all of them “buy.” Just three months ago, only a single analyst rated the stock “buy,” whereas four had it at “hold,” and three at “sell.” The average target price is $15.20 per share, implying 26% upside from the Friday close.

Williams Trading has downgraded Birkenstock shares to “hold” and lowered its target price by 4% to $44 per share. The firm believes frequent promotions could erode the brand’s premium positioning and train customers to wait for discounts rather than purchase products at full price.

Wall Street nevertheless remains broadly upbeat on the stock. It has 18 “buy” calls from analysts versus five “hold” recommendations and one “sell” rating. The average target price is $46.30 per share, implying around 20% upside from the Friday closing price.