First Solar Shares Surge on Strategic U.S. Manufacturing Expansion

Despite delivering quarterly results that only partially met analyst projections, First Solar has captured significant market enthusiasm. Investors are demonstrating strong confidence in the solar technology specialist's long-term growth trajectory, with particular focus on its aggressive capacity expansion within the United States.

The primary catalyst for the recent stock appreciation was the company's announcement to construct a new U.S. manufacturing facility boasting 3.7 gigawatts of capacity. This strategic move is designed to capitalize on increasing federal support for domestic solar energy production. The factory is scheduled to commence operations by the end of 2026, reaching full production capacity around mid-2027. This timeline aligns perfectly with the anticipated surge in demand for American-made solar technology.

Financial Institutions Revise Targets Upward

The financial community responded swiftly to this development. Several prominent institutions raised their price targets for First Solar shares. Goldman Sachs reaffirmed its "Buy" recommendation, maintaining a target of $316. Morgan Stanley increased its projection to $275. This optimistic sentiment was echoed by Jefferies and TD Cowen, which also issued significant upward revisions. The collective message from market researchers is a firm belief in the company's long-term growth narrative.

Should investors sell immediately? Or is it worth buying First Solar?

Navigating Short-Term Challenges

The most recent quarter was not without its setbacks. The cancellation of orders totaling 6.6 gigawatts with BP partners presented a notable challenge. However, First Solar's management has proactively addressed this issue, highlighting that it is already negotiating new contracts. These new agreements are expected to feature higher selling prices, approximately $0.36 per watt. With a substantial order backlog of 53.7 gigawatts stretching out to 2030, the company's project pipeline remains robust.

Favorable Market Conditions Support Growth

The timing of First Solar's expansion appears exceptionally well-calibrated. The U.S. solar market is experiencing a boom, largely driven by incentives embedded within the Inflation Reduction Act. Furthermore, the company's proprietary cadmium-telluride thin-film technology provides a strategic advantage, insulating it from supply chain vulnerabilities that often affect conventional silicon-based competitors.

The critical question for investors is whether First Solar can maintain its current momentum. The foundational elements for sustained growth are firmly in place; the company's next task is to execute its ambitious plans successfully.