Markets March Higher, First Solar Breaks $190 PT, NEXTracker Beats on Earnings in a Big Way

Stocks Erase Early Losses on Trade De-Escalation

Tariffs have been a significant market driver early in 2025, causing a brief 12% fall in the S&P 500. However, a series of trade announcements have reversed those losses, bringing the market back to flat for the year.

The key catalyst came over Mother's Day weekend, when the Trump Administration announced that the U.S. and China agreed to a 90-day tariff pause, reducing the tariff rate on U.S. imports from China from 145% down to 30%. China reciprocated by lowering its tariff on U.S. goods from 125% to 10%. Following this news, the S&P 500 surged over 4% this week, erasing nearly all of 2025's prior losses.

For the renewable energy sector specifically, the trade pause is significant. Chinese tariffs had been compressing margins for companies with international supply chains and creating uncertainty around project economics. The 90-day window gives solar developers more confidence to move forward with procurement decisions.

First Solar Surges Beyond My $190 Target: What's Next?

New policy developments confirm that the IRA 45X solar tax credits will likely remain intact. The Trump Administration's "Big, Beautiful Bill" has made its way out of the Ways and Means Committee and into the House of Representatives. Investors expected the bill would significantly revise or even slash Solar's 45X tax credits. However, it has only minor revisions, including a phase-out process beginning in 2029.

Responding to this news and the China-U.S. 90-day tariff pause, First Solar has surged beyond my initial $190 price target. With the IRA tax credits now confirmed through at least 2029, First Solar's revenue visibility has improved materially. The company's FY2025 guidance of $5.3-5.8 billion in revenue and $1.65-1.7 billion in 45X tax credits remains on track. Combined with continued margin expansion and a growing domestic manufacturing base, I have revised my revenue forecasts upward and am implementing a new price target of $262 per share, representing an additional 38% upside from the original $190 level.

NEXTracker Delivers a Major Earnings Beat

NEXTracker posted a strong earnings surprise, with key financial metrics beating analysts' expectations:

The company also raised guidance for FY26 with revenues at the midpoint of $3.3 billion, beating analyst expectations by 3.3%.

Revenue Growth

NEXTracker's revenue growth continues to accelerate. Over the last 4 years, the company has experienced a CAGR of 25% as backlogs continue to grow. This showcases strong global demand for solar energy and tracking technology. With utility-scale solar installations expanding globally and NEXTracker holding 23% market share, the company is well-positioned to capture a disproportionate share of industry growth.

Backlog Expansion

NEXTracker's backlog increased to $4.5 billion in the latest quarter, up 12% YoY and averaging a 45% increase over the last 2 years. Backlog growth outpacing revenue growth is worth monitoring, as it creates fulfillment pressure. However, the company has mitigated this risk by expanding its global manufacturing footprint to over 25 U.S. locations and strategic international facilities, tying production capacity to demand.

EPS Growth

NEXTracker's EPS continues to grow at a remarkable rate, experiencing a CAGR of 128% over the last 2 years. This level of earnings growth reflects the company's ability to scale operations while maintaining cost discipline, converting backlog into revenue without sacrificing margins.

Bentek Acquisition

NEXTracker also announced the acquisition of Bentek Corporation for $78 million. Bentek specializes in electric balance of system (EBOS) technology, the electrical infrastructure used to carry electricity across solar fields. This acquisition gives NEXTracker vertical integration into a component it previously sourced externally, broadening its supply chain and further decreasing per-project costs for customers.

Looking Ahead

The combination of trade de-escalation and IRA policy clarity has created a strong backdrop for solar equities. First Solar and NEXTracker are positioned on different ends of the value chain, with First Solar capturing the manufacturing and tax credit advantage while NEXTracker dominates the tracking technology layer. Both benefit from the same macro tailwinds, but face different risks: First Solar's thesis hinges on the durability of IRA tax credits through 2029, while NEXTracker's depends on converting its growing backlog into revenue without margin compression. Investors with exposure to the solar sector should continue monitoring both.