First Solar, Inc. (NASDAQ:FSLR) is among the largest US-based solar panel makers. The company is known for a homegrown technology meant to differ from Chinese peers. On September 24, 2026, First Solar fell 10.3% to $172.16, trading near its 52-week low and about 46% below its 52-week high of $320.95. Even amid the decline, the stock manages to sustain a consensus Buy rating from Wall Street firms and an average price target above $270. Analysts have stuck with it for weeks. First Solar drew bullish coverage earlier this month despite the stock’s weakness.
Why the Stock Keeps Sinking
The primary issue faced by the company is interest rates. Solar farms require large investments, which are often funded with borrowed money. Therefore, when rates rise, those projects get more expensive, and some get delayed. Compared to safe bonds, solar will look less attractive under higher rates. In addition to this, policy and legal concerns also surround the stock. A substantial portion of the company’s operating margin depends on Inflation Reduction Act manufacturing subsidies, including Section 45X clean-energy tax credits. Investors fear those supports could be cut back. On top of that, ongoing securities litigation regarding past disclosures on international tariff exposure adds another cloud over the stock.
The Bull Case
The bulls see a company with a real edge. First Solar makes its panels in America with its own technology. As such, it benefits from tariffs on foreign solar as well as from rules that reward domestic production. The company also holds a huge backlog of signed orders, which offers a steady stream of revenue in the future. Furthermore, thanks to AI data centers, the electricity demand is climbing quickly. The growth supports the need to build more clean energy. And trading near 12 times trailing earnings, the stock is valued well below its historical multiple.
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The Bear Case
The bears remain skeptical. If Washington trims solar tax credits, First Solar’s profits could take a real hit. Alongside this risk, higher-for-longer rates keep pressuring the whole industry, and analysts have been cutting their forecasts, which suggests estimates may still be too high. The lawsuits further increase the uncertainty and could keep that uncertainty alive for months. Institutional ownership shows slight moderation. As per the Insider Monkey data, 64 hedge funds held FSLR in the second quarter of 2026, down from 67 in the first, with short interest of almost 13% of the shares.
The Bottom Line
The valuation debate contrasts First Solar’s contracted backlog and domestic manufacturing advantages against macro headwinds and policy risks. To the bulls, First Solar, Inc. is a moated leader with a big backlog and a wave of new power demand, getting sold off too hard. And to the bears, the stock is facing multiple headwinds, including rising rates, shaky subsidies, and open lawsuits, which makes them believe that the low price may still not be cheap enough. Fresh updates from analysts and the upcoming quarter earnings reports could shed more light on which way the stock is heading.
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This article is originally published at Insider Monkey.
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