Here is Why Enphase Energy (ENPH) Fell Today

The share price of Enphase Energy, Inc. (NASDAQ:ENPH) fell by 19.6% on May 22, 2025. Let’s shed some light on the development.

A solar panel array stretched across a large open field, its glimmering panels reflecting the sun.

Enphase Energy, Inc. (NASDAQ:ENPH) is a global energy technology company and the world’s leading supplier of micro-inverter-based solar and battery systems. The company has shipped approximately 80 million microinverters, and approximately 4.7 million Enphase-based systems have been deployed in more than 160 countries around the world.

Enphase Energy, Inc. (NASDAQ:ENPH) suffered a major setback after the House of Representatives narrowly passed President Trump’s sweeping tax and spending bill, which may slash numerous green-energy subsidies that have supported the renewable energy sector and have devastating consequences for the ballooning solar power industry. The legislation, now headed to the Senate, makes it difficult or impossible for solar companies to claim tax credits that amount to half the cost of some projects. The rooftop solar industry will be particularly hit hard as the bill ends tax credits for installers that lease equipment to customers, in addition to eliminating a tax credit for homeowners who own their own panels. As a result, the sales of Enphase Energy’s inverters would take a hit from lower demand for rooftop solar.

Enphase Energy, Inc. (NASDAQ:ENPH) has already been struggling, with revenue contracting from $2.3 billion in 2022 to $1.33 billion in 2024. The sharp slowdown comes as a result of industry-wide headwinds, including channel inventory destocking, weakening demand in major markets like the U.S.— impacted by policy changes such as California’s NEM 3.0 — and macroeconomic uncertainties. The company also missed both earnings and revenue estimates in the first quarter of 2025 and has also been a victim of downgrades by several analysts over the last month.

While we acknowledge the potential of ENPH 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. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than ENPH but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

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Disclosure: None.