Why First Solar Stock Skyrocketed This Week
First Solar (NASDAQ: FSLR) stock is surging. The solar power specialist's share price ended the week up 40.1% from last Friday's market close, according to data from S&P Global Market Intelligence.
The price rose thanks to positive coverage from analysts and excitement about the company's opportunities to capitalize on the artificial intelligence (AI) revolution. The stock also gained ground on news that China's key regulatory agency for solar energy was in favor of easing downward pricing pressures created by intense competition.
Wall Street is warming up to First Solar
First Solar stock hit a decade-long high this week thanks to news that China's most important solar regulatory agency was urging providers to shift away from pricing wars. The solar energy stock also received substantial price-target increases from analysts at UBS, Piper Sandler, and JPMorgan Chase.
Citing demand for electricity created by the rise of artificial intelligence, UBS raised its one-year price target on First Solar stock from $252 per share to $270 per share. The firm sees dramatic earnings growth ahead and expects that annual per-share earnings will rise from $7.74 last year to $36.74 per share in 2027.
JPMorgan's analysts also raised their one-year target on the stock from $240 per share to $262 per share. Meanwhile, Piper Sandler raised its price target on the stock from $195 per share to $219 per share due to a favorable outlook for average selling prices.
What comes next for First Solar stock?
First Solar now has a market capitalization of roughly $29.6 billion, and is valued at approximately 6.6 times this year's expected sales and 20 times this year's expected earnings. Meanwhile, the company posted revenue of roughly $794 million in this year's first quarter -- down from roughly $1.16 billion in last year's fourth quarter but up from $548.3 million in sales it posted in Q1 last year.
FSLR Market Cap data by YCharts
First Solar's business performance will likely continue to be shaped by the macroeconomic backdrop, energy industry shifts, and the regulatory climate. On the other hand, the company has plenty of long-term growth potential, and the recent attention that its stock has been getting as an AI play opens the door for a sustained rally in the near term.
Should you invest $1,000 in First Solar right now?
Before you buy stock in First Solar, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and First Solar wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $635,982!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.
*Stock Advisor returns as of May 13, 2024
JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool recommends First Solar. The Motley Fool has a disclosure policy.
