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The stock of First Solar, Inc. (NASDAQ:FSLR) took a hit on May 19, 2025, falling by over 7.5%. Let's discuss why it happened.
A solar panel farm with an orange sky illuminating the vast landscape.
First Solar, Inc. (NASDAQ:FSLR) is a leading American solar technology company and a global provider of responsibly produced, eco-efficient solar modules. FSLR is unique among the ten largest solar manufacturers in the world for being the only US-based company and not manufacturing in China.
Before May 19, the stock of First Solar, Inc. (NASDAQ:FSLR) had surged by more than 45% over the last month after a report that U.S. House GOP lawmakers had come up with a big tax and spending package that included less extreme credit cuts for the solar and wind industries. The stock also benefited from rating upgrades, most recently by Goldman Sachs, which raised its price target from $204 to $255.
However, solar stocks, including FSLR, took a major hit on May 19 after conservative Republican lawmakers revealed that they had secured a commitment from leadership to terminate key clean-energy tax credits earlier than expected, as part of a broader strategy to advance President Trump’s tax and spending plans. It had initially been reported that many energy credits, including a tax incentive for clean energy production, would begin to phase out in 2029 and completely end in 2032. So the news of an early cancellation, though not yet specified, has stirred concerns among investors about the future profitability and growth of solar energy companies, which still rely heavily on favorable policy support and subsidies from Washington.
Although he declared an 'energy emergency', Donald Trump's administration leans heavily towards fossil fuels and away from renewables like wind and solar. In fact, the President went so far as to say:
"You know what people also don’t like, those massive solar fields built over land that cover 10 miles by 10 miles. I mean they are ridiculous, the whole thing.”
That said, First Solar, Inc. (NASDAQ:FSLR) represents real value, having proven its mettle through continued innovation. The company manufactures a proprietary, advanced thin-film module, which can perform better than competing silicon modules in less-than-ideal conditions, such as low light and hot weather. Its panels are also larger in size, reducing the cost per watt and making them ideal for utility-scale projects.
While we acknowledge the potential of FSLR to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than FSLR and that has 100x upside potential, check out our report about this cheapest AI stock.