First Solar Stock Rises 19.2% in a Month: What Should Investors Do?

First Solar FSLR shares have risen 19.2% over the past month, outperforming its Zacks Solar industry’s growth of 14.3%. The company is benefiting from its efforts to expand its U.S. manufacturing capacity to take advantage of the high demand.  Image Source: Zacks Investment ResearchOther solar stocks, such as SolarEdge Technologies SEDG and Canadian Solar CSIQ, have also outperformed the industry in the past month. Shares of SEDG have risen 16.7% while those of CSIQ have gained 98.5% during the same time frame.Considering First Solar’s outperformance, investors might be left wondering if this is a good time to add FSLR stock to their portfolio. Let's examine the factors that contributed to the share price gain and assess the stock's investment prospects to make an informed decision.Factors Acting in Favor of FSLRFirst Solar is experiencing robust demand from the U.S. market, primarily driven by growing interest in its advanced thin-film solar modules. Additionally, it stands to gain indirectly from the ongoing artificial intelligence boom, as the rapid expansion of data centers to support artificial intelligence applications is significantly increasing electricity consumption, thereby boosting demand for renewable energy sources such as solar power.The company recently commenced operations at its fourth and fifth manufacturing facilities in the United States and completed the expansion of its manufacturing footprint at its existing facilities in Ohio. The company has added 2.7 gigawatt ("GW") of gross booking since the previous earnings call, and its total booking backlog is 54.5 GW extending through 2030, which indicates a strong demand for FSLR’s products.Amid the rapid global expansion of solar energy, First Solar continues to make significant investments to scale up its module production and strengthen manufacturing capacity. In the third quarter of 2025, the company produced 3.6 GW and sold 5.3 GW of solar modules. As of Sept. 30, 2025, its total nameplate production capacity across all facilities was approximately 23.5 GW. With a well-established presence in the United States, India, Malaysia, and Vietnam, First Solar benefits from a strong international footprint. First Solar's upcoming 3.7 GW module finishing line in the United States, scheduled to commence operations in the fourth quarter of 2026, is anticipated to increase total production capacity and drive continued revenue expansion. These initiatives highlight the company's capacity expansion strategy, providing revenue visibility and stability for the years ahead.FSLR Stock’s Earnings EstimatesThe Zacks Consensus Estimate for 2025 earnings per share (EPS) indicates a decrease of 3.05% and that for 2026 EPS implies an increase of 2.8% over the past 60 days.  Image Source: Zacks Investment ResearchThe Zacks Consensus Estimate for SolarEdge Technologies’ 2025 and 2026 EPS indicates an increase of 7.99% and 1,500%, respectively, in the past 60 days. The bottom-line estimate for Canadian Solar’s 2025 EPS indicates no change, and that for 2026 EPS implies an increase of 1.06% over the past 60 days.Challenges Faced by FSLRFirst Solar faces several headwinds, including heightened trade tensions and tariff risks, with new reciprocal tariffs imposed on countries where it manufactures. The U.S. government’s new reciprocal tariffs, ranging from 19% to 25% on countries where First Solar manufactures, and up to 50% on India, could limit the company’s ability to sell certain modules in the United States and disrupt operations at some overseas facilities.A potential global oversupply of solar modules, largely driven by massive capacity expansion in China, may cause pricing volatility and competitive pressure, which could negatively impact First Solar’s financial performance.FSLR’s Earnings Surprise HistoryFSLR beat on earnings in one of the trailing four quarters and missed in the remaining three, delivering a negative average surprise of 6.63%. Image Source: Zacks Investment ResearchSolarEdge Technologies beat on earnings in three of the trailing four quarters and missed in one, delivering a negative average surprise of 24.9%. Canadian Solar beat on earnings in two of the trailing four quarters and missed in two, delivering a negative average surprise of 177.9%.FSLR’s Return on Equity Higher Than IndustryThe company’s trailing 12-month return on equity of 16.61% is higher than the industry average of 11.03%. Return on equity, a profitability measure, reflects how effectively a company utilizes its shareholders’ funds to generate income. Image Source: Zacks Investment ResearchFSLR Stock Trades at a DiscountFirst Solar is currently trading at 12.15X, a discount compared to its industry’s 18.39X on a forward 12-month P/E basis. Image Source: Zacks Investment ResearchWhat Should Investors Do?First Solar is seeing strong U.S. demand for its thin-film solar modules and stands to benefit from rising electricity needs driven by AI-related data center growth. First Solar’s continued capacity expansion supports steady long-term revenue growth and strengthens its global position.However, considering its declining near-term earnings estimates, new investors may look for a better entry point. The present investors should stay invested and enjoy the benefits of higher ROE. FSLR carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. #1 Semiconductor Stock to Buy (Not NVDA)The incredible demand for data is fueling the market's next digital gold rush. As data centers continue to be built and constantly upgraded, the companies that provide the hardware for these behemoths will become the NVIDIAs of tomorrow.One under-the-radar chipmaker is uniquely positioned to take advantage of the next growth stage of this market. It specializes in semiconductor products that titans like NVIDIA don't build. It's just beginning to enter the spotlight, which is exactly where you want to be.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report First Solar, Inc. (FSLR): Free Stock Analysis Report Canadian Solar Inc. (CSIQ): Free Stock Analysis Report SolarEdge Technologies, Inc. (SEDG): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks