Jim Cramer on Nextracker (NXT): “Not Great, Not Bad – You’re Okay, Sun Seekers!”

Jim Cramer’s recent analysis of Nextracker Inc. (NASDAQ:NXT) captures the paradox of a stock that’s neither a clear winner nor a disaster—yet sits at a critical crossroads. “Not Great, Not Bad – You’re Okay, Sun Seekers!” sums up his nuanced take on the solar tracker specialist, which has delivered solid results but faces headwinds from policy uncertainty and a shifting energy landscape. Let’s dissect why investors might want to keep NXT on their radar, even as Cramer tempers enthusiasm with caution.

The Q3 Earnings Surprise: A Solar Powerhouse in Action

Nextracker’s third-quarter 2025 results were a masterclass in execution. Revenue hit $679 million, exceeding estimates by $28 million, while adjusted EPS of $1.03 crushed the 59-cent consensus. Management raised full-year guidance, projecting $2.8–2.9 billion in revenue and a record backlog “significantly greater than $4.5 billion.” This backlog, with 87% expected to convert within eight quarters, signals robust demand for its solar tracking systems—critical infrastructure for large-scale renewable projects.

The market responded with a 16% after-hours surge to $46.20, surpassing NXT’s 2025 peak of $45.27. Yet shares closed at $43.07 the next day, reflecting skepticism about whether the rally could sustain.

Cramer’s Caution Amid Strong Results: “Hold-Equivalent” Despite the Hype

While Cramer acknowledged Nextracker’s execution, his CNBC Investing Club maintained a hold-equivalent rating and $55 price target. The hold isn’t about fundamentals—it’s about policy risks. Under the Trump administration, solar subsidies could face scrutiny, and trade policies might disrupt supply chains. CEO Dan Shugar emphasized Nextracker’s diversification—partnerships with U.S. steel mills and international suppliers—but the political wildcard remains.

Cramer also downplayed NXT’s AI angle. While solar is a long-term beneficiary of AI’s rising energy demands, he prioritizes direct AI plays (e.g., his unnamed “10,000% return” stock) over clean energy stocks. This reflects a broader theme: investors are chasing shorter-term gains in tech over infrastructure plays like NXT.

The Bigger Picture: Solar’s Growth vs. Political Headwinds

Nextracker’s $4.5 billion backlog is a testament to solar’s growth, driven by utilities’ shift to renewables and the Inflation Reduction Act’s tax incentives. Its “100% domestic content” solar trackers qualify for the 10% investment tax credit, a critical advantage over rivals. Competitors like Array Technologies struggle to match Nextracker’s scale and cost efficiency, which lowers the levelized cost of energy (LCOE)—a key metric for project feasibility.

However, risks loom:
1. Policy Uncertainty: A Trump administration focused on fossil fuels could curb solar incentives.
2. Tariff Battles: Global trade tensions could disrupt supply chains, even with Nextracker’s diversification.
3. Margin Pressures: Competitors are cutting prices, squeezing profit margins. Barclays recently lowered its price target to $47, citing these risks.

Data-Driven Analysis: The Case for Caution, Not Abandonment

• Analyst Consensus: As of May 2024, analysts rated NXT a “moderate buy” with an average price target of $58.17, implying a 37.7% upside from its then-price of $42.25. While this target was for 2024, the $4.5 billion backlog suggests 2025 could meet or exceed expectations.
• ETF Exposure: NXT’s inclusion in clean energy ETFs like the Invesco Solar ETF (TAN) and Global X Clean Tech ETF (CTEC) signals institutional confidence.
• Hedge Fund Activity: 39 hedge funds held NXT as of Q3 2024, up from 20 in Q2—a sign of growing institutional interest.

Conclusion: A “Hold” That Could Turn into a Buy

Jim Cramer’s “not great, not bad” assessment is spot-on. Nextracker is a solid, if unspectacular, investment—a play on solar’s long-term growth but one that’s vulnerable to policy shifts. The $4.5 billion backlog and tax credit tailwinds argue for patience, while the hold rating reflects political risks and competition.

Investors should consider:
- Buying on dips: NXT’s post-earnings retreat to $43.07 creates an entry point below its $55 target.
- Watching policy signals: A Trump administration’s stance on solar subsidies could redefine the stock’s trajectory.
- Sticking with solar: The sector’s 26% CAGR through 2029 (per the EIA) positions NXT as a core holding for clean energy portfolios.

In short, Nextracker is no “diamond in the rough”—it’s a polished gem with clear risks. For now, it’s a hold for solar bulls, but one that could shine brighter if policy clouds clear.

Final Note: Always conduct your own research and consult a financial advisor before making investment decisions.