Shares of First Solar rose 1% on Friday following a sharp decline, as major Wall Street firms downplayed the threat from Tesla's ambitious solar manufacturing plans. Elon Musk announced targets for 100 gigawatts of annual production, but analysts cited supply constraints and First Solar's advantages as mitigating factors. While one firm downgraded the stock, overall sentiment remained positive.
First Solar Inc. (FSLR) experienced volatility in its stock price last week amid news of Tesla Inc.'s (TSLA) expanded solar ambitions. On Thursday, FSLR shares slipped over 10% after Tesla CEO Elon Musk reiterated plans to scale solar manufacturing. During Tesla's fourth-quarter earnings call on Wednesday, Musk stated, "The solar opportunity is underestimated. The best way to power AI datacenters is solar and batteries on earth, and solar in space. That's why we are going to work towards getting 100GW/year of solar cell production, integrating across the entire supply chain from raw materials to all the way to finished solar panels."
Musk first mentioned the 100 gigawatts annual target at the World Economic Forum in Davos the previous week, aiming for deployment within three years, or by the end of 2028 according to recent Tesla job listings. These listings seek engineers to "deploy 100GW of solar manufacturing from raw materials on American soil before the end of 2028," enough capacity to power roughly 20 million homes.
Wall Street largely dismissed competition concerns for First Solar. Mizuho analysts argued that fully U.S.-made solar modules would be capital intensive and cost more than First Solar's average selling price, with scaling polysilicon and wafer capacity requiring three to four years. They noted insufficient U.S. metallurgical-grade silicon supply and expect no meaningful earnings impact through at least 2030.
Wells Fargo echoed this, highlighting First Solar's cost advantages and pricing power, maintaining an Overweight rating and recommending buys on weakness. They viewed other U.S. manufacturers, like Canadian Solar (CSIQ), as more at risk.
However, BMO Capital took a more cautious stance, downgrading First Solar to 'Market Perform' from 'Outperform' with a price target reduced to $263 from $285. The firm now sees Tesla's efforts as a potential overhang on shares, shifting from viewing Musk's earlier remarks as aspirational.
Retail sentiment on Stocktwits remained bullish for FSLR, with high message volume. One user pointed out Tesla focuses on residential solar panels, unlike First Solar's utility-scale products. Over the past 12 months, FSLR stock has gained 35%. Tesla recently announced a new 420W solar panel, underscoring its push into the sector.
