Daqo New Energy’s 24.23% Two-Day Rally Driven by Analyst Upgrades and Sector Optimism

Daqo New Energy’s shares surged to a record high on Wednesday, marking a 9.89% intraday gain and a two-day rally of 24.23%. The stock closed at its highest level since September 2025, driven by renewed investor confidence in the solar energy sector and strategic corporate initiatives.

Recent analyst activity has played a pivotal role in fueling the stock’s momentum. Multiple brokers, including HSBC and Citigroup, upgraded their ratings or raised price targets for DQ within a month, with HSBC’s “strong-buy” recommendation and Citigroup’s $37 price target signaling robust optimism. These upgrades, coupled with an average “Moderate Buy” consensus, have attracted both retail and institutional investors, amplifying demand for the stock.

The company’s $100 million share repurchase program, announced in August, further reinforced investor sentiment. While initial details of the program were unclear, the move underscored management’s belief in the stock’s undervaluation. Institutional stakeholders, including Caitong International and Harvest Portfolios, have also increased their holdings, reflecting broader confidence in DQ’s long-term potential amid a recovering polysilicon market.

Industry dynamics have contributed to the stock’s resurgence. Polysilicon prices, a critical input for DQ’s operations, have stabilized after a period of oversupply, improving margins for producers. Chinese regulators’ intervention to curb aggressive price competition has also fostered a more sustainable market environment, aligning with DQ’s cost-efficient production strategy. Analysts have revised earnings estimates upward by 37.8% in recent weeks, despite the company reporting a loss in its August earnings, indicating optimism about future profitability.

Technical indicators have further bolstered the stock’s appeal. DQ’s price surged 14.1% in a single session to $28.40, breaking above key resistance levels. The 52-week high and elevated trading volumes suggest strong momentum, attracting algorithmic traders and momentum investors. While the stock’s beta of 0.50 indicates lower volatility compared to the market, its recent performance outpaces broader market trends, reflecting sector-specific tailwinds.

However, challenges remain. DQ’s current financial metrics, including a -65.64% net margin and -6.54% return on equity, highlight ongoing profitability concerns. Industry overcapacity and regulatory shifts could pose risks, though recent government measures have mitigated some pressures. Investors remain cautious, balancing short-term optimism with long-term uncertainties in the solar sector.