Can First Solar Maintain Its Momentum? What the Next Solar Share Price Movements May Reveal

First Solar (FSLR) has captured market attention with a 19.2% surge in the past month, substantially outpacing the broader solar industry’s 14.3% growth trajectory. The stock’s rally reflects renewed investor confidence in the company’s strategic positioning within the renewable energy sector. Peers like SolarEdge Technologies (SEDG) and Canadian Solar (CSIQ) have similarly impressed, with SEDG climbing 16.7% while CSIQ skyrocketed 98.5% over the same period.

The Growth Engine: Capacity Expansion and U.S. Demand

First Solar’s impressive performance is anchored in tangible operational achievements. The company has successfully launched its fourth and fifth U.S. manufacturing facilities while simultaneously expanding existing Ohio operations. This aggressive capacity rollout has been instrumental in capturing surging domestic demand for its advanced thin-film solar technology.

The numbers speak loudly. First Solar added 2.7 GW to its gross booking portfolio and now maintains a commanding 54.5 GW order backlog extending through 2030—a testament to robust customer confidence. In Q3 2025 alone, the company produced 3.6 GW while distributing 5.3 GW of modules, showcasing its operational agility. Total nameplate production capacity across its global footprint reached approximately 23.5 GW as of September 30, 2025.

Looking ahead, an upcoming 3.7 GW module finishing line set to go live in Q4 2026 promises further capacity augmentation. With manufacturing operations spanning the United States, India, Malaysia, and Vietnam, First Solar maintains significant geographic diversification.

The AI Tailwind Advantage

An underappreciated catalyst propelling next solar share price appreciation stems from artificial intelligence infrastructure buildout. Data center proliferation to support AI applications is driving unprecedented electricity demand, creating a structural tailwind for renewable energy providers. First Solar stands well-positioned to capitalize on this secular trend through its established market presence and expanded production capabilities.

Earnings Momentum and Valuation Appeal

The Zacks consensus has modestly adjusted 2025 EPS expectations downward by 3.05% but projects a 2.8% uptick for 2026. While these adjustments pale compared to SolarEdge’s dramatic 1,500% 2026 EPS revision or Canadian Solar’s 1.06% adjustment, they signal stabilization after near-term headwinds.

From a valuation standpoint, FSLR trades at 12.15X forward P/E—a meaningful discount to the 18.39X industry average. More impressively, the company’s 16.61% trailing 12-month return on equity substantially exceeds the industry benchmark of 11.03%, demonstrating superior capital efficiency.

Countering the Headwinds

However, potential investors must acknowledge legitimate obstacles. Escalating trade tensions pose material risks, particularly reciprocal U.S. tariffs ranging from 19-25% on First Solar’s manufacturing nations, with India facing punitive 50% rates. These measures could constrain profitability and disrupt overseas operations.

Additionally, China’s massive solar module capacity buildout risks triggering global oversupply, potentially igniting pricing wars that squeeze margins industry-wide. First Solar’s earnings track record—beating in just one of the trailing four quarters with a negative 6.63% average surprise—underscores execution vulnerabilities.

The Investment Thesis Going Forward

For prospective investors, First Solar presents a compelling long-term narrative undermined by near-term uncertainty. The company’s expanding production footprint, robust order backlog, and favorable ROE profile support sustainable growth. Existing shareholders should maintain positions and capitalize on the company’s structural advantages.

However, next solar share price performance will ultimately hinge on management’s ability to navigate tariff obstacles and defend margins against competitive pressure. New entrants may prudently await a more attractive entry point before committing capital. FSLR maintains a Zacks Rank #3 (Hold) rating, reflecting this nuanced risk-reward calculus.