Why First Solar Is A Buy-And-Hold Bet

While investor appetite for ESG stocks has ebbed and flowed since its 2021 boom, First Solar has emerged as a stock with plenty to offer as net-zero initiatives are set to support future growth. 

First Solar FSLR has endured a turbulent H1 2025 amid widespread economic uncertainty but has mounted a strong rebound from April lows to receive a fresh analyst upgrade. 

FSLR ended Q2 2025 nearly 30% higher, with Roth Capital raising its price target for the stock to $225 from $200, with analysts citing prospective benefits from the implementation of President Trump's ‘One Big Beautiful Bill' as a key driver of growth. 

However, it's First Solar's groundbreaking agreement with nanotechnology supplier UbiQD that could be the strongest long-term driver of growth for the stock. 

With a market capitalization of almost $20 billion, First Solar is one of the world's largest renewable energy stocks and is in a strong position to remain a leader in solar energy long into the future as a result of its innovative supply chain. 

Embracing Nanotechnology

On July 9, 2025, UbiQD announced a multi-year exclusive agreement to deliver its unique quantum dot (QD) nanotechnology to First Solar, in what could be a transformative development for businesses seeking to use solar power to deliver their net-zero commitments in the future. 

The partnership will see the incorporation of QD materials into First Solar's thin-film bifacial photovoltaic modules in what will be the first high-volume supply agreement outside the display industry. It's expected that the technology will maximize the effectiveness of solar panels for utility-scale applications. 

Crucially, the exclusive partnership can help to solidify First Solar's position as a market leader in manufacturing solar panels for customers in the United States and beyond, and may help the firm to gain an edge over rivals like China's Sungrow Power Supply and Saudi Arabia's ACWA POWER Company. 

Benefiting From Trump's Bill

While Trump's ‘One Big Beautiful Bill Act' will introduce severe headwinds for solar companies, eliminating the residential solar tax credit after 2025 and forcing commercial projects leveraging the 45Y or 48E tax credits to begin construction by 2026 to claim eligibility or be in service by the end of 2027 if construction starts later, the changes may be beneficial for First Solar. 

Rather than its peers, First Solar's core business model is focused on the commercial market, meaning that the phase out of the residential solar tax credit carries far less of an impact. 

Additionally, a recent update in legislation focused on introducing tax credits for subcomponents that are produced in the same facility as the larger components in which they're integrated can provide a competitive advantage for First Solar. 

First Solar's more domestic-focused supply chain means that the stock is in a strong position to thrive in the era of Trump 2.0, while other solar firms rely on sourcing components from China amid the ongoing danger of trade uncertainty. 

FSLR as a Long-Term Hold

As an ESG stock that's inspiring plenty of investor and analyst optimism alike when looking to the future, First Solar appears to be a stock with plenty of long-term potential as a stock to buy and hold. 

Even discounting the net-zero ambitions of nations and organizations globally that FSLR can support, the stock appears to be an attractive value from a price-to-earnings (P/E) perspective. 

FSLR's Forward P/E ratio of 15.55, recorded at the end of July, sits at a slight discount compared to the industry average Forward P/E of 15.86, which is highly unusual for a stock that's clearly positioning itself as a market leader supported by an exclusive supplier technology agreement. 

However, this lower P/E for First Solar reflects the risks associated with the stock in an industry that President Trump has long been skeptical of. The uncertainty surrounding the lengths that the president will go to in disregarding ESG stocks could see fresh struggles for First Solar emerge with little warning. 

There's also the matter of the company’s upcoming Q2 earnings, in which Zach's consensus estimates suggest the company will post earnings of $2.68 per share, representing a year-over-year decline of 17.5%. 

Finding Value

Adopting a more long-term outlook, FSLR can certainly achieve Roth Capital’s price targets of $225, but I believe that the advantages held in the stock's unique new supplier agreement with UbiQD and its advantageous position off the back of Trump's Big Beautiful Bill deliver a fair value closer to $250.

First Solar will reach its potential faster provided that more investors embrace ESG integration into their portfolios by observing sustainability trends throughout Wall Street and beyond. 

In Q2 2025, the S&P 500 index was level-pegging with the S&P 500, posting 9.02% growth compared to 9.59%, respectively. 

Despite this, it's the long-term sustainability commitments of the nation’s First Solar supplies that hold the key to its future growth. With the stock's key markets, the United States and France, both pledging to achieve net-zero greenhouse gas emissions by 2050, the leading solar stock is in a strong position to experience significant growth as initiatives ramp up.

Disclosure: On the date of publication, Dmytro Spilka did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer. Dmytro Spilka does not intend to make a trade in any of the securities mentioned above in the next 72 hours.

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