Freedom analyst Manuchekhr Narzulloev recommends buying First Solar (FSLR) shares at around $210 with a target of $255 by November 9, 2026. Upside potential is 21.4%. Limiting possible losses is suggested if the price falls to $185, and the recommended position size is 2% of the investment portfolio.
First Solar is one of the largest U.S. manufacturers of solar modules. The company produces thin-film panels based on cadmium telluride, builds and expands plants in the United States, and supplies equipment for large solar power plants. The company’s shares trade on the Nasdaq under the ticker FSLR.
The correction created an attractive entry point
After publishing its second-quarter results, First Solar shares continued to decline and, at the time of preparing this investment idea, were trading around $210. This is about 35% below the June peak of $320.95.
Over the past month, the stock lost 16.1%, and over the quarter, 35.1%. By comparison, the S&P 500 index fell 0.2% and rose 1.8% over these periods, respectively. First Solar shares significantly lagged both the broader market and the technology sector.
The Freedom analyst links the correction to investor caution regarding the pace of new order inflows, utilization of overseas facilities, and the future terms of government support for solar energy. At the same time, First Solar’s fundamentals remain resilient, and the full-year guidance was not cut.
First Solar reaffirmed its 2026 guidance
In the second quarter, the company’s revenue decreased by about 4% year over year to $1.06 billion. The decline was due to the termination of certain customer contracts, though it was partially offset by higher shipments of solar modules.
Net income increased from $342 million to $423 million, and earnings per share from $3.18 to $3.92. Adjusted earnings before interest, taxes, depreciation and amortization rose from $560 million to $644 million.
Gross margin reached 57.3% versus 45.6% a year earlier, and operating margin 42.6% versus 33%. At the same time, about $89 million of positive impact was provided by the expected refund of previously paid duties. Additional support came from tax credits and lower shipping costs, so part of the quarterly profit improvement was one-off in nature.
First Solar maintained its 2026 guidance. The company expects revenue of $4.9 billion to $5.2 billion, gross profit of $2.4 billion to $2.6 billion, and adjusted earnings before interest, taxes, depreciation and amortization of $2.6 billion to $2.8 billion. Net cash at year-end is projected in the range of $1.7–2.3 billion.
Order book reached $13.6 billion
As of June 30, First Solar’s order book stood at 45.1 GW totaling about $13.6 billion. A gigawatt is a unit of power equal to 1 billion watts. Existing contracts provide for deliveries of solar modules through 2030, which supports good visibility into future revenue.
At the same time, the backlog has been gradually shrinking: at the end of 2025 it amounted to 50.1 GW, and at the end of the first quarter, 47.9 GW. In recent reporting periods, the volume of shipments completed exceeded the number of new orders. The pace of replenishing the backlog remains one of the key indicators for investors.
After the end of the second quarter, the dynamics improved. First Solar received about 1.9 GW of new orders in the U.S. at an average price of about $0.36 per watt. Another more than 2 GW related to contracts whose effectiveness depends on meeting certain conditions, and for an additional 2 GW the company continued negotiations.
For this investment idea to play out, the backlog does not need to return to its previous peak levels. A positive signal could be a gradual convergence between new order volumes and current shipments.
Production expansion will support First Solar shares
The company has five fully integrated manufacturing facilities in the U.S. and is building a sixth site in South Carolina. It is intended for the final stage of module manufacturing, with production starting at First Solar’s overseas facilities.
The first phase of the new plant is expected to begin operating in the second half of 2026, and the second by mid-2027. Once at full capacity, the facility will be able to process up to 3.5 GW of solar modules annually. The expansion should increase utilization of overseas capacity, reduce shipping costs, and raise the share of products meeting U.S. localization requirements.
Additional support comes from a federal tax credit for U.S. manufacturers of clean energy components. For a module fully produced in the U.S. and sold to a third-party buyer, First Solar estimates the credit at about $0.17 per watt.
The company’s competitive position is also reinforced by trade restrictions. Unlike most manufacturers, First Solar uses cadmium telluride rather than crystalline silicon, so new U.S. measures affect overseas suppliers of competing silicon panels to a greater extent.
Data centers create a new source of demand
Rising electricity consumption by data centers could broaden First Solar’s customer base. Such centers bring together servers and other equipment needed for data storage and processing, cloud services, and artificial intelligence systems.
One example is the Steel River Energy Center solar power plant in Arkansas. The first phase of the project, with capacity of about 1.6 GW, will be built using First Solar modules and is intended to meet Google’s growing electricity needs.
Previously, Freedom considered First Solar as one of the potential beneficiaries of rising power consumption by AI systems. The development of such projects could gradually reduce the company’s dependence on traditional solar power plant customers.
The third-quarter report will be the main event
The key checkpoint for this investment idea will be the third-quarter report, which is expected to be published in late October. First Solar forecasts module sales of 3.9 GW to 4.5 GW and adjusted earnings before interest, taxes, depreciation and amortization in the range of $625–775 million.
Investors will also assess new contracts, the pace of production ramp-up in South Carolina, and confirmation of the full-year guidance. Improvement in these indicators could provide grounds for a recovery in the share price.
In August, Freedom already noted the resilience of First Solar’s business after strong second-quarter results. Since then, the continuation of the correction has improved the potential return-to-risk ratio; however, the investment idea itself still falls into the high-risk category.
Key risks include slow inflows of new orders, changes in government support for the industry, delays in plant ramp-ups, and lower utilization of overseas manufacturing capacity. Pressure on the shares could also increase if guidance deteriorates or if the third-quarter results are weak.
Not an individual investment recommendation.