First Solar stands to gain significantly from the growing demand for electricity fueled by artificial intelligence as major tech companies seek clean energy sources to power their expanding data centers. In a CNBC article titled “First Solar earnings could surge 370% by 2027 as Big Tech hunts for renewables to power AI, UBS says,” Spencer Kimball quotes Jon Windham Senior at UBS as saying, “We see FSLR as a hidden gem, benefiting directly from the increasing demand for electricity driven by AI. Many (including ourselves at times) saw FSLR as a flawed technology.” Jon’s projections suggest that First Solar's earnings could rise by 374% to $36.74 per share by 2027. This positive outlook has prompted UBS to raise its stock price target for First Solar to $270 per share, indicating a potential 38% increase from recent levels. Jon Windham and his team at UBS emphasize that the demand for electricity from AI surpasses traditional needs, prompting tech giants like Amazon, Microsoft, Meta, and Google to invest in renewable energy to match their consumption heavily.
Large-scale solar power has become a key component of corporate power purchase agreements, largely driven by these tech companies. First Solar’s growing market share in this sector highlights its ability to capitalize on the increasing demand for clean energy. Previously viewed as a high-cost manufacturer at a disadvantage compared to cheaper Chinese competitors, First Solar’s position has been strengthened by recent U.S. policies. Tariffs on Chinese products and incentives under the Inflation Reduction Act (IRA) have made First Solar more competitive. The company’s thin-film solar technology, once seen as a drawback, now offers a strategic advantage amidst growing protectionism against Chinese silicon modules. Coupled with domestic manufacturing incentives, this has enhanced First Solar’s appeal.
First Solar’s vertically integrated supply chain enables rapid production scaling, positioning it to meet growing demand efficiently. The company’s plans to expand its production capacity from 3.9 gigawatts to 13.1 gigawatts by 2030 are supported by new factories in Alabama and Louisiana, in addition to its existing plant in Ohio. These expansions will allow First Solar customers to benefit from the 10% domestic content tax credit under the IRA, making its solar modules more cost-effective. First, Solar energy is viewed as a lower-risk option compared to imports facing U.S. tariff uncertainties. Goldman Sachs shares this positive outlook, raising its price target to $268 following a strong first quarter. First Solar executives have noted a significant increase in demand expectations driven by data center growth, reinforcing the company’s position as a preferred supplier for tech-driven renewable energy needs.
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