US mulls equity stakes in chipmakers receiving CHIPS Act Funds - Reuters
Investing.com - First Solar (NASDAQ:FSLR), currently trading at $199.95 with a market capitalization of $21.4 billion, has been named a top pick by UBS following the release of favorable IRS guidance on August 15, 2025.
The IRS guidance broadly maintained year-end 2030 tax credit eligibility with only modest qualification changes, which UBS views as "a win for the industry." This development clears policy uncertainties that have affected solar sector sentiment for over a year. According to InvestingPro, First Solar’s stock has responded positively, showing a significant 9.78% return over the past week.
UBS expects First Solar’s adjusted EPS to grow from $12 per share in 2024 to $32 per share by 2027, not accounting for further capital redeployment. With a current P/E ratio of 17.39 and impressive gross margins of 42.76%, the firm notes that ramping U.S. production should drive significant market share gains for the company.
The investment bank highlights that demand for U.S. utility-scale solar projects is outpacing supply, driven by electricity consumption growth at AI data centers built by technology companies with 100% renewable or clean energy targets. With a projected revenue growth of 26% for FY2025, InvestingPro analysis suggests First Solar is well-positioned to capitalize on this trend, though it’s currently trading above its Fair Value.
UBS also anticipates potential upward earnings revisions for First Solar in 2026 and beyond from accretive capital deployment, including the possible announcement of finishing line capacity in the near term. For deeper insights into First Solar’s valuation and growth prospects, access the comprehensive Pro Research Report available exclusively on InvestingPro.
In other recent news, First Solar reported stronger-than-expected financial results for the second quarter of 2025. The company achieved earnings per share of $3.18, surpassing analyst projections of $2.66. Revenue also exceeded expectations, reaching $1.1 billion compared to the anticipated $1.04 billion. Following these results, UBS reaffirmed its Buy rating on First Solar, maintaining a price target of $255. UBS highlighted the positive policy outlook as a reason for their continued confidence. Additionally, UBS raised its price target on First Solar to $275 from $255. This adjustment reflects an unchanged multiple applied to First Solar’s estimated 2027 earnings, discounted by one year. These developments indicate a positive outlook from analysts for the company’s future performance.
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