First Solar: one of the largest solar module manufacturers in the U.S.

First Solar (FSLR) is one of the largest U.S. manufacturers of solar modules. The company uses its proprietary cadmium telluride thin-film technology and is not dependent on the crystalline silicon supply chain, a significant portion of which is concentrated in Asia. The stock’s pullback has improved the potential return-to-risk balance, while a large order backlog, capacity expansion in the U.S., and trade protection for the domestic market support the investment thesis.

Investment attractiveness factors:

• The order backlog provides high delivery visibility. As of June 30, contracted deliveries totaled 45.1 GW with a total value of about $13.6 bn, and existing agreements run through 2030. After the end of Q2, the company secured about 1.9 GW of new orders in the U.S. at an average price of about $0.36 per watt. More than 2 GW was in agreements with deferred conditions, and active negotiations were ongoing for about another 2 GW.
• Financial results confirm strong profitability. In Q2, revenue declined by about 4% y/y to $1.06 bn; however, net income rose from $342 mn to $423 mn. EPS increased from $3.18 to $3.92, adjusted EBITDA—from $560 mn to $644 mn. Gross margin improved from 45.6% to 57.3%, operating margin—from 33.0% to 42.6%.
• Production tax credits support profitability. Under Section 45X of the U.S. Internal Revenue Code, First Solar can receive about $0.17 per watt for a module fully manufactured in the country and sold to a third-party buyer. The 2026 gross profit forecast of $2.4–2.6 bn includes about $2.10–2.19 bn of such credits.
• U.S. trade policy strengthens the competitive position. From December 4, 2026, the minimum import price for solar cells will be $0.22 per watt and for finished modules—$0.38 per watt. A 15% duty is also being introduced on polysilicon derivatives. The restrictions primarily affect manufacturers of competing silicon modules, while First Solar uses cadmium telluride.
• Manufacturing expansion and data-center demand create additional opportunities. The company has five fully integrated facilities in the U.S. and is building a sixth site in South Carolina with capacity of up to 3.5 GW. The first phase is expected in the second half of 2026, the second—by mid-2027. Data centers could be an additional source of demand: the first phase of the Steel River Energy Center solar power plant with capacity of about 1.6 GW will be built using First Solar modules and is designed, among other things, to meet Google’s electricity needs.
• A strong balance sheet reduces reliance on borrowed capital. As of June 30, long-term debt had been fully repaid versus about $283 mn at the end of 2025, while gross and net cash positions were about $1.7 bn. FactSet consensus assumes a recovery in free cash flow from negative $0.36 bn in 2026 to about $1.8 bn in 2027.

Target price: $255