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

Stocks Erase Early Losses, Now Flat for 2025

Tariffs have been a significant market driver early in 2025, which caused a brief 12% fall in the S&P 500. However, considering the recent trade announcements, the markets have recovered to flat for the year.

The Trump Administration announced a trade deal with the United Kingdom late last week. According to whitehouse.gov, the deal is structured as follows:

• The UK will import more agricultural goods from the U.S., including ethanol and beef.
• The 10% reciprocal tariff rate originally announced on "Liberation Day" remains intact.
• The first 100,000 vehicles imported into the U.S. each year remain subject to the 10% tariff rate, while any vehicle imported after that is subject to a 25% tariff rate.

Markets stayed generally flat in response. However, the Trump Administration subsequently announced plans to meet with Chinese representatives in Geneva to begin negotiations toward a trade deal.

As Mother's Day weekend came to an end, the Trump Administration announced that the U.S. and China agreed to a 90-day tariff pause. This brought the previous tariff rate on U.S. imports from China of 145% down to 30%. China followed suit and reduced its 125% tariff to 10% on U.S. goods. Following this news, the equity markets marched higher, with the S&P 500 up over 4% this week.

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 boomed beyond my initial conservative $190 price target. I remain optimistic about the company's long-term growth trajectory and have revised revenue forecasts, implementing a $262 price target.

NEXTracker Delivers a Major Earnings Beat

NEXTracker posted a strong earnings surprise. 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 explosive revenue growth continues. 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.

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. As stated in my previous article, there are some risks to these rapidly growing backlogs, especially since they are growing faster than revenues. Although the company has done a great job strengthening its global supply chain and manufacturing facilities to meet demand.

EPS Growth

NEXTracker's EPS continues to grow at a remarkable rate, experiencing a CAGR of 128% over the last 2 years. This further proves the company has been able to expand its operations and manage backlogs while keeping costs low and increasing profitability.

Bentek Acquisition

NEXTracker also announced the acquisition of Bentek Corporation for $78 million. With this acquisition, NEXTracker gains cutting-edge electrical technology and a broadened supply chain, further decreasing costs. Bentek specializes in electric balance of system (EBOS) technology — electrical infrastructure used to carry electricity across solar fields.

NEXTracker's earnings report blew analyst expectations out of the water. The company continues to expand global operations and grow important financial metrics at a rate that analysts struggle to keep up with. With significant revenue growth and profitability expansion, the future is bright for NEXTracker.