Why First Solar Is A Must-Watch Stock In The AI Era

Zinger Key Points
  • Analysts raise First Solar's target to $270, highlighting its AI-driven electricity demand benefit.
  • Despite nearing overbought RSI, strong technicals show bullish trend for First Solar stock.

As the artificial intelligence revolution gains momentum, a bullish analyst foresees a surge in electricity demand, which they said is a boon for solar companies like First Solar Inc FSLR.

First Solar stock has returned 39.38% to investors over the last year, over 60% YTD, and about 80% over the last six months.

Powering AI-Driven Electricity Needs

UBS analysts raised their stock price target for First Solar stock to $270 a share, citing its alignment with AI-driven electricity needs. This upgrade reflects the company’s potential to capitalize on the growing demand for renewable energy in powering AI applications.

First Solar offers thin-film solar modules, offering distinct advantages in speed to market and value proposition. The company’s expansion in U.S. manufacturing, coupled with domestic incentives like the Inflation Reduction Act’s manufacturing tax credit, could position it favorably for growth.

Additionally, the White House’s recent move to remove the bifacial-module exclusion further strengthens the outlook for American solar manufacturing.

With a forecasted surge in earnings per share and a track record of exceeding expectations, First Solar remains a key player in the evolving landscape of renewable energy.

Analysts anticipate sustained growth as the company continues to leverage its technological expertise and market positioning amidst the AI-driven energy transition.

Also Read: Deep Dive Into First Solar Stock: Analyst Perspectives (21 Ratings)

Charts Validate Bullish Analyst Outlook

Chart: Benzinga Pro

The bullish analyst outlook for First Solar is bolstered by strong technical indicators, with the stock’s price consistently above its five-, 20- and 50-day exponential moving averages, signaling a robust uptrend and buying pressure.

Additionally, First Solar stock’s price exceeds its eight-, 20-, 50- and 200-day simple moving averages, indicating a buy signal.

Overbought RSI Suggests Caution

Chart: Benzinga Pro

The Moving Average Convergence Divergence indicator supports a bullish rating at 18.22, but caution is advised as the Relative Strength Index (RSI), at 87.83, suggests the stock is overbought.

The Bollinger Bands suggest a bullish rating, with the stock trading in and beyond the upper band.

Overall, technical analysis aligns with analyst optimism, but investors should be mindful of potential short-term corrections due to the stock’s overbought status, according to the RSI.

Read Next: Solar Is Leaving Wind In The Dust As World Renewable Energy Hits New High

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