The overall energy industry has fallen by almost 8% since the beginning of the year, weighed down by the slump in crude oil prices and the prospects of a global economic slowdown. On the other hand, the clean energy sector has largely remained flat, posting YTD gains of 0.6% at the time of writing this piece.
Solar energy has emerged as a leading candidate in the current global ‘green transition’, thanks in large part to its cost, reliability, availability of supply chain, and speed of construction. Moreover, a significant increase in battery power over the last few years and reductions in battery costs have helped drive solar power’s growth by delivering firm power even during early morning and evening peak power conditions.
So it doesn’t come as a surprise that the United States installed a record-breaking 50 gigawatts (GW) of new solar capacity in 2024, the largest single year of new capacity added to the grid by any energy technology in over twenty years. Moreover, a recent report by Wood Mackenzie and the Solar Energy Industries Association revealed that solar and storage accounted for 84% of all new electric generating capacity added to the grid last year.
A significant growth opportunity for the sector has emerged in the form of the ongoing AI boom and its accompanying data centers. According to a study by the American Clean Power Association, electricity demand in the US is expected to surge by 35-50% by 2040, driven by domestic manufacturing growth, data centers, and mass electrification. Solar power is a primary candidate to fill this supply gap, since it can be built faster and more affordably than any other technology.
That said, the rapidly expanding sector has suffered a serious setback since the beginning of the year, primarily due to President Trump’s global trade war and his reversal of the Biden-era energy and climate policies. The current administration wants to refocus efforts on the fossil fuel sector, while conservatives push Congress to wipe out tax incentives for clean energy. As a result, over half of the nearly $30 billion in clean technology factories that were scheduled to come online this year — including manufacturing facilities for solar, wind, batteries, and electric vehicles — are now predicted to face delays or cancellations, according to a report by BloombergNEF.
Solar investors are also fretting about the increasing uncertainty amidst the global tariff war, as the majority of US solar panel imports were coming from Southeast Asian countries like Thailand, Malaysia, and Vietnam. While the President has imposed a 90-day pause on imposing reciprocal levies, it is clear that no country is safe from his tariffs. However, this troublesome geoeconomic landscape has granted a significant advantage to companies that are manufacturing domestically. However, they still must import parts, increasing their costs.
To give an example of how tariffs can impact the industry, let us remember Donald Trump’s last tenure as president, when he imposed a 30% tariff on imported solar cells and panels in 2018. This policy led the country’s renewable energy companies to cancel or freeze investments of over $2.5 billion in large-scale installation projects, resulting in thousands of lost jobs.
Is Canadian Solar Inc. (CSIQ) the Best Solar Energy Stock to Buy According to Hedge Funds?
A fleet of solar power plants under the dazzling sun, shooting off a burst of light.
Our Methodology
To collect data for this article, we scanned Insider Monkey’s database of 1,009 hedge funds and picked the top 11 companies operating in the solar energy sector with the highest number of hedge fund investors in Q4 2024. When two or more companies had the same number of hedge funds investing in them, we ranked them by their market cap as of the writing of this piece. The following are the Best Solar Energy Stocks According to Hedge Funds.
At Insider Monkey, we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Canadian Solar Inc. (NASDAQ:CSIQ) is one of the largest solar technology and renewable energy companies in the world. Over the last 23 years, the company has successfully delivered over 125 GW of premium-quality solar photovoltaic modules to customers around the globe.
Canadian Solar Inc. (NASDAQ:CSIQ) missed forecasts in Q4 2024 as its adjusted EPS of -$1.47 fell below expectations by $1.23. The company’s revenue of $1.52 billion also missed estimates by $45.81 million, besides being down 10.62% YoY. However, CSIQ’s energy storage business witnessed rapid growth in FY 2024, with 6.6 GWh of energy storage shipments during the year, up by over a staggering 500%. 2024 also marked the largest execution year in the history of Recurrent Energy, Canadian Solar’s global product development business. RE successfully brought 1.3 gigawatts of solar projects to commercial operation across the US, Italy, Brazil, Japan, and Taiwan last year.
Canadian Solar Inc. (NASDAQ:CSIQ) expects FY 2025 revenue to range between $7.3 billion and $8.3 billion, with a focus on energy storage growth. Just last month, the company announced that it had secured $183 million in financing for its Fort Duncan storage project in Texas, which is expected to be commercially operational by this summer.
Overall, CSIQ ranks 11th on our list of the best solar energy stocks to buy according to hedge funds. While we acknowledge the potential of CSIQ as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than CSIQ but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
