First Solar’s Hot Run Cools as Investors Turn Cautious

First Solar ( (FSLR) ) has fallen by -9.46%. Read on to learn why.

First Solar shares fell 9.46% over the past week as investors reassessed the stock after a powerful rally that had already priced in much of its good news. The solar manufacturer has surged from under $150 to around $250 over the past nine months, helped by booming demand for renewable energy, AI-driven data center power needs and strong policy support in the U.S. Analysts at Bank of America and Deutsche Bank still rate the stock a Buy, with targets well above current levels, and Wall Street’s overall view remains a Moderate Buy.

The recent pullback reflects growing concern that the risk‑reward has become less attractive at current prices. Several analysts see only modest upside from here, with average price targets suggesting limited gains relative to the big move already achieved. There is also unease about valuation compression as earnings growth inevitably slows, and about the stock’s high beta, which could magnify any broader market or AI‑capex downturn.

Underlying fundamentals remain solid: First Solar enjoys a protected competitive position thanks to steep U.S. tariffs on low‑cost Asian solar imports, a large project pipeline exceeding current manufacturing capacity, and a strong balance sheet supported by customer prepayments and Section 45X tax credits. However, those tax credits are set to phase down after 2029, and some analysts argue the market is already paying up for these tailwinds. That mix of strong business momentum but thinner margin of safety has prompted more cautious sentiment, helping drive First Solar’s 9.46% decline over the week.