We recently compiled a list of the 8 Most Promising Solar Stocks According to Hedge Funds. In this article, we are going to take a look at where First Solar, Inc. (NASDAQ:FSLR) stands against the other most promising solar stocks according to hedge funds.
The solar industry has experienced significant growth over the past four years, largely due to supportive policies from the Biden administration. The industry’s resilience is notable, as analysts and industry officials believe that solar power’s rise can withstand potential policy changes under the Trump administration, which has pledged to dismantle clean power subsidies and related policies.
However, there are several hurdles to overcome. Trump has pledged to impose a 10% tariff on goods from China, a critical source of solar components for U.S. developers. This tariff, in addition to those already imposed by the Biden administration, is likely to increase the cost of new solar projects, potentially slowing installations until domestic supply chains can ramp up. The domestic solar supply chain is also rapidly expanding and many new solar component manufacturing plants are located in states that voted for Trump in 2024. These manufacturers argue that the administration needs to maintain its current course to foster further growth. The cost of solar projects will also depend on whether the Trump administration follows through on its promises to roll back critical subsidies and tax breaks established by Biden’s 2022 climate law.
READ ALSO: 12 Cheapest Stocks with Biggest Upside Potential and Top 10 Undervalued Tech Stocks to Buy According to Hedge Funds.
According to a report by S&P Global published on January 13, the clean energy sector is experiencing significant transformations, with solar photovoltaic (PV) technology taking center stage. The report, titled “Top Cleantech Trends for 2025,” forecasts that cleantech energy supply investments, including solar PV, will reach $670 billion in 2025, marking the first time these investments will outpace projected upstream oil and gas spending. Solar PV is expected to represent a substantial portion of these investments, accounting for half of all cleantech investments and two-thirds of installed megawatts. This shift underscores the growing dominance of renewable technologies, particularly solar, in the global energy landscape.
The report highlights that despite the significant financial commitment to solar PV, the overall investment levels remain insufficient to meet urgent climate goals of tripling renewable capacity by 2030. The report also addresses the challenges and opportunities within the evolving solar supply chain. An oversupply of solar equipment from China is affecting the solar, wind, and battery sectors, leading to price declines that may stabilize in 2025. However, the competition from Chinese manufacturers is expected to keep prices low, fundamentally altering industry pricing dynamics.
Despite uncertainties, the trajectory of solar power remains overwhelmingly positive, driven by technological advancements, increasing investments, and the urgent need to meet global climate goals.
A solar panel farm with an orange sky illuminating the vast landscape.
Our Methodology
To compile our list of the 8 most promising solar stocks according to hedge funds, we used Finviz and Yahoo stock screeners, and clean energy ETFs to compile an initial list of 25 solar energy stocks. We then used Insider Monkey’s Hedge Fund database to rank 8 stocks according to the largest number of hedge fund holders, as of Q3 2024. The list is sorted in ascending order of hedge fund sentiment.
Why do we care about what hedge funds do? 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
First Solar, Inc. (NASDAQ:FSLR)
Number of Hedge Fund Investors: 59
First Solar, Inc. (NASDAQ:FSLR) is a global manufacturer of thin-film solar panels and a provider of photovoltaic (PV) power plant solutions. The company specializes in producing high-efficiency, cadmium telluride-based solar modules, which offer superior performance in hot and humid climates. First Solar, Inc.’s (NASDAQ:FSLR) clients include utility-scale project developers, independent power producers, and energy companies. The firm also develops and sells large-scale solar farms and plays a renewable energy transition.
First Solar, Inc. (NASDAQ:FSLR) has made remarkable progress in expanding its manufacturing capacity and advancing its technology. The company recently opened a $1.1 billion manufacturing facility in Alabama, which will add 3.5 gigawatts of vertically integrated solar production capacity once fully operational. Additionally, the company is on track to commence operations at its Louisiana facility in the latter half of 2025 to support its objective of exceeding 14 gigawatts of annual U.S. nameplate capacity and 25 gigawatts globally by 2026.
In addition to capacity expansion, First Solar, Inc. (NASDAQ:FSLR) is focusing on next-generation thin-film photovoltaic innovation. The company is launching CuRe, a program that replaces copper with other elements, at its Ohio facility and plans to advance its perovskite technology via a new development line in Perrysburg, Ohio. Furthermore, First Solar, Inc. (NASDAQ:FSLR) is proactively safeguarding its intellectual property rights, particularly its TOPCon patent portfolio, by issuing notification letters to Tier 1 solar manufacturers suspected of patent infringement.
Overall FSLR ranks 1st on our list of the most promising solar stocks according to hedge funds. While we acknowledge the potential of FSLR 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. 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 Complete List of 59 AI Companies Under $2 Billion in Market Cap
Disclosure: None. This article is originally published at Insider Monkey.