10 Best Solar Stocks to Buy in 2025

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1. First Solar Inc. (NASDAQ:FSLR)

Upside Potential: 94%

Number of Hedge Fund Holders: 65

At the top of our list is First Solar Inc. (NASDAQ:FSLR), which is a global provider of solar energy solutions, specializing in thin-film photovoltaic (PV) modules. Its proprietary cadmium telluride (CdTe) technology offers higher efficiency and cost benefits compared to traditional silicon-based panels. With a market capitalization of nearly $14 billion, it is one of the largest solar-focused companies.

By the end of 2024, First Solar achieved approximately 21 gigawatts (GW) of global nameplate manufacturing capacity, an increase of over 4 GW from 2023, driven by the new Alabama facility and optimized throughput in Ohio. The company is also building a $1.1 billion manufacturing facility in Louisiana, set to begin operations in the second half of 2025. This facility will boost total capacity to over 25 GW by 2026. For FY 2025, First Solar projects revenue between $5.3 billion and $5.8 billion, reflecting a 32% year-over-year growth.

However, despite steady Q4 2024 results, the company reported quality issues in some products, leading to increased warranty expenses, potentially reaching $100 million, which has raised concerns among analysts.

In light of the company’s 2025 outlook, a Barclays analyst factored that impact into his estimates and revised the price target for First Solar Inc. (NASDAQ:FSLR), reducing it from $273 to $236 while retaining an Overweight rating on the stock. According to the analyst, India’s operations are expected to achieve their full production capacity, whereas facilities in Malaysia and Vietnam are anticipated to fall short. Additionally, costs indirectly related to First Solar’s warranty issues are projected to increase the cost per watt sold beyond prior guidance for 2025. This, in turn, has led the analyst to lower gross margin forecasts.

While we acknowledge the potential of FSLR to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than FSLR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

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