Solar stock soars to decade high on AI, tariff hopes.

By Oliver Townsend May 22, 2024
First Solar Stock Breaks Out To Decade-High Amid AI, Tariff Optimism.jpegOrginal image from: https://www.investors.com/news/technology/first-solar-stock-solar-stocks-ai/

First Solar, a U.S.-based solar manufacturer, recently experienced a significant surge in its stock price, reaching its highest level in over a decade. This surge was part of a broader rally in solar stocks, fueled by optimism surrounding new tariffs on Chinese solar cell imports and a bullish report highlighting First Solar as a beneficiary of artificial intelligence. Let’s delve into the factors contributing to First Solar’s breakout and the implications for the solar industry.

First Solar’s Stock Surge

First Solar’s stock price soared by over 17% to reach 250.24, reflecting the positive sentiment in the solar industry. Other solar companies like Array Technologies, Nextracker, and Enphase Energy also witnessed notable gains. The Invesco Solar ETF saw a nearly 10% increase in recent trading, indicating a strong uptrend in the sector.

Over the past year and a half, solar stocks faced challenges due to inflation and rising interest rates, impacting project financing. However, the recent announcement by President Joe Biden to increase tariffs on Chinese solar cells from 25% to 50% has provided a boost to U.S.-based solar firms like First Solar.

First Solar: AI Winner?

Analysts believe that First Solar is well-positioned to benefit from the tariff changes and the growing demand for American-made solar panels. The company’s unique technology aligns with key industry trends, such as the increasing use of artificial intelligence in electricity demand forecasting.

UBS analysts predict that First Solar’s earnings could triple by 2027, reaching $36.74 per share, driven by AI adoption. Tech giants like Amazon, Microsoft, Alphabet, and Meta committing to renewable energy sources further support the demand for solar power, creating a favorable environment for companies like First Solar.

Implications for the Solar Industry

With its breakout to decade-high levels, First Solar’s stock performance signals a positive outlook for the solar sector. The company’s growth potential, coupled with industry tailwinds such as AI integration and U.S. protectionism, positions it as a key player in the evolving energy landscape.

As solar stocks continue to rally and investor interest grows, the sector is poised for further advancements and innovations. The shift towards renewable energy sources and technological advancements like AI present exciting opportunities for companies like First Solar to lead the charge towards a sustainable future.

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