Is FSLR a good stock to buy? We came across a bearish thesis on First Solar, Inc. on Monopolistic Investor’s Substack by Antoni Nabzdyk. In this article, we will summarize the bears’ thesis on FSLR. First Solar, Inc.’s share was trading at $190.29 as of March 27th. FSLR’s trailing and forward P/E were 13.57 and 11.51 respectively according to Yahoo Finance.
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First Solar, Inc. (FSLR) operates as a solar panel manufacturer with a Nabzdyk Ratings Moat Score of 6.3/10, reflecting the asset-heavy and cyclical nature of its business. While the company has achieved a perfect 10/10 Quality Score for execution, driven by disciplined margin expansion and free cash flow per share growth, these achievements are argued to be short-term and highly dependent on regulatory tailwinds such as the U.S. Inflation Reduction Act (IRA) and supply chain compliance premiums.
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The business remains fundamentally exposed to commodity pricing pressures, geographic concentration in the U.S., and volatile demand in emerging markets like India and Chile. First Solar’s recent positive free cash flow is largely temporary, influenced by IRA credits, and does not reflect a stable long-term cash generation profile. Revenue growth, including an 80% year-over-year surge in Q3 2025, has been accompanied by severe gross margin compression, highlighting the structural limitations of its cost-driven model.
The company faces declining backlog trends, with a 14% drop in 2024 versus 2023, suggesting that order momentum may not sustain. Furthermore, First Solar operates in a competitive market where Chinese panels dominate on price, and U.S. tariffs and protectionist policies create uncertainty rather than security.
While the sector benefits from secular solar demand, First Solar’s ability to capture value efficiently is questionable, leaving investors exposed to cyclical swings and capital erosion risks. On a valuation basis, the market may be underestimating downside risks despite pricing in high growth expectations. Overall, First Solar remains a high-risk, capital-intensive commodity player with limited predictability, making it a bearish proposition for long-term investors seeking stable, compoundable returns.
Previously, we covered a bullish thesis on First Solar, Inc. (FSLR) by Long-Term Pick in March 2025, which highlighted the company’s strong financial performance, capacity expansion, supportive regulatory tailwinds under the IRA, and long-term growth potential with module sales of 18–20GW. FSLR’s stock price has appreciated by approximately 39.73% since our coverage. Monopolistic Investor shares a contrarian view but emphasizes temporary free cash flow, margin compression, and the risks of its cyclical, commodity-heavy business model.
First Solar, Inc. is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 79 hedge fund portfolios held FSLR at the end of the fourth quarter which was 67 in the previous quarter. While we acknowledge the risk and potential of FSLR as an investment, our conviction lies in the belief that some 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 and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
